DIGITALBOX PLC
ANNUAL REPORT
AND ACCOUNTS
2021
DIGITALBOX PLC
CONTENTS
DIGITALBOX PLC
CHAIRMAN’S STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2021
Contents
Chairman’s Statement
Chief Executive’s Statement
Strategic Report
Corporate and Social Responsibility Report
Corporate Governance Report
Audit Committee Report
Remuneration Committee Report
Directors’ Report
Directors’ Responsibilities Statement
Independent Auditor’s Report
Consolidated Statement of Comprehensive Income
Consolidated Statement of Changes in Equity
Consolidated Statement of Financial Position
Page
3
4 - 9
10 - 16
17
18 - 24
25
26
27 - 28
29
30 - 33
36
37
38
Consolidated Statement of Cash Flows
39 - 40
Notes forming part of the Consolidated Financial Statements
41 - 64
Company Statement of Financial Position
Company Statement of Changes in Equity
65
66
Notes forming part of Company Financial Statements
67 - 70
Directors, Secretary and Advisers
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Chairman’s Statement
FOR THE YEAR ENDED 31 DECEMBER 2021
I am delighted to report that Digitalbox
plc (‘Digitalbox’) has successfully
continued to deliver on its growth
strategy in 2021 as it strengthened all
parts of its business.
When the management team set
about building Digitalbox they did so by
identifying consumer media trends that
they were confident would play out over
the medium term. These trends have
generally been accelerated by the global pandemic
which, whilst painful for all in 2020, have progressed
the business more quickly than would have once
been anticipated.
As the market continued to experience uncertainty
throughout the year, Digitalbox was able to quickly
adapt, benefiting from the agile structures put in
place during 2020. With strong editorial propositions
running through the portfolio, the teams expertly
navigated the market to extract great value over the
year, assisted by some post-pandemic tailwinds. The
delivery of the female audience at scale is continuing
to build a premium price from advertisers.
As the year progressed, the business has built its gross
cash position from a starting point of £1.9m to £2.2m
at 31 December 2021. While maintaining the CBILS
loan from 2020, this increasingly puts the business
in a stronger position when it comes to making
investment decisions and the team have continued to
review potential acquisitions and opportunities for in-
house growth. The amount outstanding on the CBILS
loan as at 31 December 2021 was £0.4m. The gross
cash balance on hand as at 25 March 2022 was £2.7m.
In terms of acquisitions, The Tab is a great example
of how Digitalbox acquire and improve a business.
Moving into operating profit in its first month
of ownership, the asset paid back over 70% of its
purchase price by the year end alongside bringing
other financial benefits to the business. The team
spent time further integrating the editorial operation
whilst strengthening its commercial operations, which
saw advertising session values more than double for
the critical trading month of December.
Much of Digitalbox’s success has been driven by its
Graphene platform. With a technology team briefed
to optimise everything they can from a mobile
perspective, Graphene is constantly evolving as
the market changes and is behind the company
strengthening its position in all key areas, including
commercial growth and audience engagement.
This combination of maintaining agile structures,
delivery on strategy and using skills to best adapt to
positive market conditions has led to a 68% year-on-
year growth in revenue and a strong £1.0m of adjusted
EBITDA compared to £0.3m in 2020.
Adjusted EBITDA is defined as the operating profit/
(loss) after adding back depreciation, amortisation,
share based payments, acquisition and listing costs,
direct costs associated with business combinations
and capital restructure costs.
We strengthened the Board with the appointment of
Philip Machray in July 2021 as an independent non-
executive director.
While we all hope the chief impacts of the pandemic
are largely over, this mobile-first business is in
excellent shape to take advantage of the new
economic landscape.
As management are strengthening the operating
team through new appointments, we remain highly
cash generative and with healthy cash reserves in
hand, we are in a great position to deliver further
opportunities for growth in 2022.
Marcus Rich
Chairman
28 March 2022
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ANNUAL REPORT & ACCOUNTS 2021 | digitalbox.comANNUAL REPORT & ACCOUNTS 2021 | digitalbox.com DIGITALBOX PLC
CHIEF EXECUTIVE’S STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2021
DIGITALBOX PLC
CHIEF EXECUTIVE’S STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2021
Chief Executive’s Statement
FOR THE YEAR ENDED 31 DECEMBER 2021
2021 was an important year for
Digitalbox, with profitable growth and
further progress made in delivering our
strategy of building a leading mobile-
focused media business. We developed
our portfolio, attracted new audiences
and monetised them effectively. The
successful year-end outcome has been
greatly aided by our knowledge, focus
and technology allowing us to drive
benefit from our strategic positioning.
Profitable
growth and
delivering our
strategy
Against a backdrop of economic disruption created
by the pandemic, we were well served by operating in
the segment of the advertising market which presents
the most accountable and relevant commercial
solutions. When pressure was placed on marketeers
in 2020 and 2021, they chose to increasingly shift their
spend to targeting highly engaged users on mobile
devices – Digitalbox’s heartland. As we have continued
to build our audience base to become one of the
most significant publishers for women in the UK, we
have benefited from the market demand for quality
advertising inventory at scale for this demographic.
FINANCIAL REVIEW
Like the major platform businesses (Facebook/Google/
Amazon), Digitalbox has benefited from a positive
shift in consumer media behaviour and the arising
marketing trends. Traffic has been stimulated by the
ubiquity of mobile devices that has seen usage time
climb to record levels in 2021. Advertising markets also
grew back strongly, and while the market returned in
a less traditional shape due to some macro-economic
challenges, it really surged forwards over the year.
With this momentum in the market, Digitalbox
again traded profitably in 2021 delivering an adjusted
EBITDA of more than £1.0m while building its gross
cash position to £2.2m as at 31 December 2021. The
business therefore ended the year with revenues up
68% year on year to £3.7m, which the Board consider a
significant achievement. Revenues include 12 months
of trading on The Tab to 31 December 2021 (versus
three months of trading in 2020). The outcome is a
strong indicator of the Digitalbox business model.
Gross profit was £3.1m (2020: £1.7m) delivering a year-
on-year margin increase on the back of advertising
rates recovering and delivering healthy gross margins
of 86% (2020: 76%). Adjusted EBITDA for the year was
£1.0m (2020: £0.3m), and our adjusted EBITDA margin
doubled to 28% (2020: 14%).
Digitalbox has a low capital expenditure requirement
and is not working capital hungry. This, together with
the successful £1.2m placing with Downing Ventures
in October 2020, alongside our CBILS loan of £0.45m
secured in the same month, ensured that the business
continued to strengthen its balance sheet and cash
reserves, ending the year with £2.2m of cash (2020:
£1.9m). We retained the CBILS loan but repaid the
£50k Bounce Back Loan inherited when we acquired
Tab Media Limited.
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ANNUAL REPORT & ACCOUNTS 2021 | digitalbox.comANNUAL REPORT & ACCOUNTS 2021 | digitalbox.com DIGITALBOX PLC
CHIEF EXECUTIVE’S STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2021
DIGITALBOX PLC
CHIEF EXECUTIVE’S STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2021
MARKET LANDSCAPE
As the AIM market has seen new entrants from the
media industry over the past year, it is good to see
this increased activity draw attention to our sector. It
has also been increasingly pleasing to see the market
recognise the value contained within the Digitalbox
business, with further headroom on valuations given
those of comparable peers. There are commonalities
in our operation to that of LBG Media plc and our
UK female audience figures are positioned positively
alongside those of Future plc.
OPERATING REVIEW
2021 was a year of continued uncertainty due to
the pandemic, but it further demonstrated the
effectiveness of the digital advertising medium as its
share grew towards 60% of global ad spend. As the
pandemic disrupted movement and shopping habits,
it rapidly accelerated the adoption of ecommerce via
the most personal of channels, the mobile device.
With Digitalbox’s mobile-first focus, we were well
positioned for the market adjustments of 2021 and
remain very well placed for the forecast growth over
coming years.
Projected Global Digital / Mobile Ad Spend
683
643
602
560
515
465
62%
64%
60%
66%
68%
70%
2021
2022
2023
2024
2025
2026
Global Digital Ad Spend $bn*
Mobile % of total*
*Source: Statista Worldwide Digital Advertising Report Nov 2021
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Digitalbox currently owns and operates three trading
brands – Entertainment Daily, The Daily Mash and
The Tab. Entertainment Daily produces and publishes
online UK entertainment news covering TV, showbiz
and celebrities. The Daily Mash delivers online satirical
news articles in its own distinctive style and The Tab is
the UK’s largest student and youth culture site fuelled
by a network of more than 30 local university sites. All
three brands generate revenue from advertising in
and around the content they publish.
Our user base grew 82% year-on-year as we
strengthened our portfolio of assets over the 12-month
period. As well as building out further strands to our
existing brands we invested in ensuring The Tab was
as well integrated as possible to benefit from our
technology and drive its commercial success.
Compelling content remains at the core of the
Digitalbox offering, created by talented teams with an
expert understanding of their respective audiences.
We couple this expertise with our proprietary mobile-
first tech stack, Graphene. Named after the incredibly
fast, light, super-conductive material, Graphene has
been shaped to deliver the best user experience
through the fastest and lightest page load speeds on
mobile and highly efficient advertising auctions that
drive value through competitive tension. It enables
audiences to scale rapidly with the least resistance
from the technology as the major platforms continue
to up-rank publishers in real time as speed quickens.
The Tab has proved to be a great success since its
acquisition at the end of 2020. It has now paid back
over 70% of its purchase price within the first 15
months of ownership. We have been considering
further acquisitions and have been highly selective,
rejecting some targets owing to the nature of
their broken business models and some for being
overpriced. We continue to scour the market and
with cash in the bank will move quickly where we can
realise the appropriate value.
The Digitalbox team is being scaled to bring capacity
for further growth on our existing brands and to
ensure any acquisitions can be quickly integrated,
while operational efficiencies remain strong.
LEADING AS A MOBILE-FIRST BUSINESS
Our strategy to create a mobile-first business has
positioned us as a market leader for both audience
engagement and monetisation. Push media skills
remain critical and our brands continue to engage
consumers at scale with over 88% of our audience
on Entertainment Daily, The Daily Mash and The Tab
visiting on mobile devices. With an average of over
22m monthly user visits to our sites, we provide truly
significant user scale to the market.
As noted earlier, mobile advertising spend was
growing well ahead of the pandemic. The COVID-19
pandemic has accelerated the trend, with digital
advertising now accounting for 64% of all global
advertising expenditure. As part of our Graphene
technology suite that supports our mobile-first
strategy, we have built a new Graphene Ad Stack
(G.A.S.) which enables optimisations to be rapidly
applied. As previously reported, our G.A.S. video player
has helped contribute to our growth with record
revenues being generated in December 2021.
PORTFOLIO GROWTH
Entertainment Daily saw its user-base grow as the site
diversified its traffic sources. The site was named by
UK Press Gazette as the fastest growing news site in
the UK for two months running. Google now accounts
for over 40m sessions and is set for further growth
as we invest more in SEO content and optimisation
alongside the Discover feed. Facebook also performed
well as the turbulence within its ecosystem reduced
after the challenges of the US elections in 2020.
The editorial team hit all the TV and showbiz stories
as the news broke, maximising traffic and social
engagement around moments that caught the
nation’s imagination.
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We acquired the UK’s
most successful student and
youth culture site, The Tab in late 2020. The site was
founded by three students at Cambridge in 2009
as a reaction to out-of-touch student papers and
since then it has exploded into one of the biggest
youth media sites in Britain, speaking directly to
Generation Z and engaging with more than six million
users a month. Content is driven by a core team
based in London who work with student journalists
on more than 30 subsites across UK campuses,
offering a mix of smart takes on trending youth
culture and strong campaigning editorial. Not only
is this an incredible opportunity to engage with this
influential demographic, it also opens up a pool of
smart journalist talent who may well be interested in
contributing to the broader Digitalbox business.
While The Tab’s founders were right about the need
for a fresh, relevant platform for the student audience,
we have spent time refining the commercial
approach. G.A.S. has increased its impact over 2021
with the December 2021 session values being up more
than 100% over the previous December. This is a great
case study in how our approach can take websites
forward with a much more efficient operating model.
The Daily Mash had a strong year growing back from
the Facebook misinformation algorithm that caused
setbacks in 2020 when Facebook/Meta struggled to
identify the difference between satire and fake news.
With a highly loyal core audience we decided to
diversify our revenue sources on the site through the
test launch of an ad-free experience behind a paywall.
ANNUAL REPORT & ACCOUNTS 2021 | digitalbox.comANNUAL REPORT & ACCOUNTS 2021 | digitalbox.com
DIGITALBOX PLC
CHIEF EXECUTIVE’S STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2021
DIGITALBOX PLC
CHIEF EXECUTIVE’S STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2021
Corporate Highlights
REVENUE
ADJUSTED EBITDA
£3.7m vs £2.2m in 2020
£1.0m vs £0.3m in 2020
ADJUSTED EBITDA MARGIN
ADJUSTED EBITDA PER SHARE
28% vs 14% in 2020
0.9p vs 0.3p in 2020
AD EXTRA TEAM DAY SHOTS
This test has proved very encouraging with over 450
subscribers and we plan to scale the project with
the addition of a premium content offering for these
paying visitors. We also moved our TV relationship
from BBC2 to UK TV’s Dave channel where the Late
Night Mash show upped its on-air time from 30
mins to 45 minutes per episode and increased
the number of episodes from six to nine for
the season. The show achieved fantastic BARB
(Broadcasters Audience Research Board)
audience figures by establishing itself as the
channel’s third best performing show for the
year and delivering more than double the slot
average audience.
CULTURE AND PEOPLE
We are focused on creating a culture that enables
talented people to do their best work. Even before
the pandemic that meant being flexible rather than
harbouring traditional views of office culture or
adopting a one-size-fits-all approach. We continue
to mix office-based roles and remote working
arrangements, full-time and part-time positions, staff
and freelance contributor agreements to marry the
needs of the business with those of our people.
During the year our teams rose to the challenges
presented by reduced face-to-face contact while
delivering great results. Good communication and a
sense of inclusion are important to us, so we publish
monthly all-staff updates on progress and stage
weekly leadership sessions alongside daily team
meetings. Building on this, in July we held our first all-
staff conference which was a fantastic opportunity to
bring everyone together and share ideas.
Recruiting and retaining great people is crucial
to our success. Our success hiring younger talent
on Entertainment Daily through its apprentice
programme has continued along with new
development opportunities, training and
development for more senior staff. The Daily Mash has
strengthened its commissioning team, and we have
used The Tab’s outreach network to bring new writing
talent onto the site.
Everyone at Digitalbox benefits from the company’s
life assurance and pension schemes and we aim
to ensure our staff are rewarded fairly and have
opportunities to progress within the business. All
team members and their immediate families have
access to our free wellbeing & support programme
including personalised healthy eating and exercise
plans, mental health support, legal and medical
advice and ways to prevent
burnout. A share options scheme
also exists for senior staff.
I would like to take the opportunity to thank
all staff across the business for their incredible hard
work and commitment during the last year and their
valuable contribution to these results. I would also
like to thank all those student journalists who have
contributed to The Tab over the year, some of whom
I had the pleasure of meeting at the brand’s annual
student curry night in Brick Lane.
BUSINESS OUTLOOK
Digitalbox has continued to develop as a profitable
UK digital media business positioned squarely in the
mobile space.
Global digital advertising spend is forecast to grow
by more than 50% in the next four years. The market
reaction to the COVID-19 pandemic has accelerated
the positive trends we had already identified, pushing
the business to the forefront as mobile devices market
share is forecast to shift from 60% of all digital ad
spend in 2021 to 70% in 2026 (see table above) and
our content and tech teams continue to strengthen
delivery through this channel.
Beyond the advertising market, the entertainment
production houses that were hit hard in 2020 are
also recovering well. 2022 is anticipated to see UK
TV production spend rise to over £10bn, which we
anticipate will benefit our audience engagement with
new shows to cover and provide further opportunities
for our associated TV show, Late Night Mash.
confidence we
can continue to
create growth
within the portfolio and
make further acquisitions
when the fit is right.
Current trading remains strong and in line with
market expectations. We remain alert to any market
adjustments as a result of the war in the Ukraine,
although Digitalbox is no more exposed than any
other primarily UK-based media business. The
Company has made a charitable donation to the
Disasters Emergency Committee to assist those
impacted by the crisis.
In short, we enter 2022 with a portfolio of assets
primed for future growth, a stronger investor base
and a confident digital advertising sector destined to
significantly increase its share of global ad spend.
The two acquisitions we have completed since our
admission to AIM – The Daily Mash and The Tab –
have proved the potential of our model, giving us
James Carter
Chief Executive
28 March 2022
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ANNUAL REPORT & ACCOUNTS 2021 | digitalbox.comANNUAL REPORT & ACCOUNTS 2021 | digitalbox.com
DIGITALBOX PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
Strategic Report
We set out to build a new digital media
The
Digitalbox
Vision
business; one driven by profit and
efficiency delivering high-quality
content engaging users at speed
and scale.
Our aim remains to generate
organic growth of our existing
assets and to acquire and transform
digital media properties with the
potential to thrive through the
application of the Digitalbox model.
We have a proven ability to grow at speed
by focusing on current and future trends; rapidly
adapting to technical advances and the habits of our
audience, free from legacy issues that frequently
cause distraction in other media businesses.
CONSUMER MEDIA BEHAVIOUR
The Digitalbox publishing model was informed
by the recognition of the growth of ‘push media’
consumption, especially on mobile – where the
most highly engaging and relevant content from
publishers is placed in users’ feeds based on trending
topics, article performance and their own behaviours
and interests.
Content-surfacing algorithms continue to be refined,
delivering a better user experience and higher rates
of engagement resulting in more time being spent
within the respective gateways to this content.
Both Meta and Alphabet continue to compete
for consumer attention through ‘push media’
consumption, and it is the publishers with the most
engaging content that will continue to benefit from
this competition. Google continues to develop its push
content strategy via its Discover feed which is now
making billions of content suggestions and Facebook
is placing a greater focus on its content tools being
more fully integrated across its platforms in a bid to
better enable creators and satisfy their audiences.
Targeting consumers via an array of distribution
channels is one thing, but having the ability to
profitably operate in those channels is where the
real skillset lies.
Whilst the major platforms continue to evolve their
models, consumers continue to support other push
media sources too, with the continued growth of
TikTok amongst the younger demographic. As a result,
we continue to see growth opportunities.
DIGITALBOX PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
RELEVANCE
Our business is currently built around a UK audience
focus which brings distinct benefits across our key
disciplines:
Our editorial content resonates strongly with our
audiences, keeping our readers coming back again
and again.
Our key advertiser relationships all have a
significant presence in our local market which
is one of the world’s most advanced marketing
economies and they place great value on high-
quality UK traffic.
The addition of The Tab at the end of September 2020
with its hyper-local university sites adds even more
depth to this element of our strategy.
GROWTH THROUGH ‘BUY AND BUILD’
On our admission to AIM in February 2019,
Digitalbox outlined a strategy to make investments
in its existing portfolio and perform acquisitions to
grow the business. We intended to identify targets
within markets that offer natural synergies with our
ongoing operations and also to expand our existing
assets into areas where there is a clear appetite from
our audiences.
The integration of The Tab acquisition in 2020 marked
our second acquisition after The Daily Mash in 2019.
The results have been pleasing as we have improved
the brand’s commercial performance to a point
where it has repaid 70% of its acquisition cost after
the first 15 months.
We will continue target and
screen acquisitions
that best align
The Tab has
repaid 70% of its
acquisition costs
after 15 months
with our processes and enhance our existing portfolio
to deliver the strategic vision. We will also continue
to develop new content verticals that offer the
opportunity to scale our existing portfolio. The fruits
of this approach included Entertainment Daily being
named fastest growing news brand in the UK for both
August and September by respected industry source
UK Press Gazette.
AUDIENCES THAT ARE IN DEMAND
Entertainment Daily reaches a core demographic
of 25-55 year old UK women; the power brokers of
UK shopping. Being frequently in charge of the
household budget they are passionate about the
territory they control. They love brands that provide
status and are always on the look-out for great deals
they can share with their friends. Our audience has
evolved to more than 4m per month and our channel
diversification saw significant growth from Google-
sourced users.
The Daily Mash is consumed by savvy UK independent
thinkers. These educated professionals respond to
the brand’s pitch-perfect skewering of the rich and
OUR APPROACH
We believe in order to be successful in today’s media environment a business, its brands and its people must be:
ENGAGING
The internet is dominated
FAST
Audiences’ expectation levels
FLEXIBLE
Digitalbox is a mobile-first
EFFICIENT
Efficiency matters because we
by platforms that compete
are higher than ever and their
media company for the simple
regard profitable operation as
for engagement and media
attention spans are lower.
reason that this is where
the key to longevity. The digital
brands that deliver the
Our content and tech teams
consumers have congregated.
market has seen many long
highest levels will prosper.
obsess about getting the best
Our future strategy will be
bets against models that fail
Our teams’ passion for their
stories to their readers as
shaped by continuing to move
the profit test. Our teams use
subjects, understanding of
quickly as possible.
with our audience. This will
every tool to maximise their
their audiences and expertise
in producing truly compelling
content, consistently deliver
market-leading levels
of engagement.
inevitably require flexibility as
impact and efficiency.
different platforms go in and
out of favour and different
devices emerge. We know
tomorrow will be different.
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VISITS
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ANNUAL REPORT & ACCOUNTS 2021 | digitalbox.comANNUAL REPORT & ACCOUNTS 2021 | digitalbox.com
DIGITALBOX PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
DIGITALBOX PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
GRAPHENE: MOBILE-OPTIMISED TECH PLATFORM
Key dates in 2021
Graphene is our scalable and
dynamic mobile-first tech stack; a
blend of technologies allowing our
websites to flourish through fast,
light-touch content delivery and
optimised mobile profitability. It
brings significant advantages to how
our sites are experienced by users
and ranked by the key platforms –
especially Alphabet and Meta – and
also enables us to reduce tech and
serving costs. Since our deployment
of the Graphene Ad Stack (G.A.S.)
The Tab has seen session values
more than double since early 2021.
Graphene will continue to evolve
through investment in our tech
roadmap in 2022 and we will on-board
future acquisitions onto the platform.
PUBLISH
OPTIMISE
PUSH
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ANALYSE
SERVE
TRANSACT
Operational KPIs
ONLINE USERS
MOBILE USERS
UK AUDIENCE
SOCIAL FOLLOWERS
122 million
(2020: 67m)
(2019: 38m)
(2018: 25m)
Users who visit Digitalbox’s
websites
107 million
(2020: 59m)
(2019: 35m)
(2018: 23m)
Numbers of users visiting
sites on mobile and tablet
devices
76 million
(2020: 51m)
(2019: 37m)
(2018: 20m)
Users of Digitalbox’s
websites based in UK
7 million
(2020: 6.7m)
(2019: 3.5m)
(2018: 2.5m)
Facebook, Twitter,
Instagram & Tik Tok
followers of Digitalbox’s
properties
2021 Figures include full year Google Analytics audience figures for Entertainment Daily,
The Daily Mash and The Tab, which was acquired in October 2020.
Feb 2021
Marcus Rich appointed
as Chairman
March 2021
Digitalbox announces
positive results for the
C19 year of 2020
April 2021
The Tab
‘Do Better’
campaign to
stop sexual
harassment
and assault
championed
by The Times
and
The Guardian
Sept 2021
The Late Night Mash TV
show broadcasts on Dave
Oct 2021
Late Night Mash
triples audience slot
average on Dave
Jan 2021
Teams move to fully flexible /
remote working
Feb 2021
G.A.S video player deployed
on The Tab
March 2021
New wellbeing
service rolled out
for all staff
Aug 2021
Entertainment Daily named
the fastest growing news site
in the UK
Sept 2021
Interim Results announce
revenues ahead
Dec 2021
Trading update issued leading
to 20% upgrade in 2021
expectations
infamous and its inventive and surreal takes on the
absurdity of modern life. Influential among their peers
thanks to their own finely-tuned view of the world,
they are seen as selective and discerning. These 25-44
year olds are power-sharers of digital media who even
in these challenging times continue to spread a smile.
The Tab was founded by three students at Cambridge
in 2009 as a reaction to out-of-touch student papers.
Since then it has exploded into one of the biggest
youth media sites in Britain, speaking directly the UK’s
15-24 year olds. They are the generation tasked with
more responsibility than any other in the last 50 years.
It will be their reinvention that heals the planet, that
creates new ways of working and cares for our ageing
population. The leaders of tomorrow, the global
citizens who need to think in a more measured and
considered fashion.
The three audiences have further scope for growth
and cross-fertilisation as they continue to demonstrate
increasing levels of engagement.
It’s also worth noting that female readers are
particularly in demand by advertisers and women
visited Digitalbox’s websites more than 180 million
times in 2021.
PORTFOLIO DEVELOPMENT
While profitability is key, we continue to invest in the
existing business. 2022 will see additional investment
across Entertainment Daily, The Tab and The Daily
Mash as we aim to deliver further meaningful growth
from diversification of our key routes to audiences.
Further detail on business performance can be
found in the Financial Review and Operating Review
sections of the Chief Executive’s Report beginning
on page 4.
Dec 2021
G.A.S. video player
delivers record revenues
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DIGITALBOX PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
Highlights
As noted, 2021 saw encouraging progress across the portfolio, including:
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N
A
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N
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I
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28 MILLION
MONTHLY SESSIONS IN DEC 2021
300M+ AD
IMPRESSIONS
IN DEC 2021
USERS BY DEVICE:
88%
MOBILE
12%
DESKTOP
81% GROWTH
IN GOOGLE
DIRECT
TRAFFIC
1100+ STORIES
52% GROWTH IN
PER
MONTH
SESSION VALUES
450 MONTHLY
SUBSCRIBERS
GENERATED FROM
PAYWALL
TEST
125% INCREASE IN
LATE NIGHT MASH TV
SHOW ON-AIR TIME
23% GROWTH IN
SESSION VALUES
150,000
VALUES Q4 2021 V Q4 2020* 148%GROWTH IN FOLLOWERS
FOLLOWERS
ON TIK TOK
121% GROWTH IN SESSION
DIGITALBOX PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
RISKS AND UNCERTAINTIES
The Board considers risk on an ongoing basis and feels
it is important to identify risks, form an objective view
on the impact of these risks, consider mitigation plans
to counterbalance them and to keep them under
constant review. The risks are those which the Board
considers, as at the date of this report, are the most
critical to the continued operation of the Group. The
risks described do not represent the totality of the risks
facing the Group and should not be relied on as such
by any person considering any investment decision in
relation to the Company’s ordinary shares.
RISK
POTENTIAL IMPACT
MITIGATION AND CONTROL
Deviation from
strategy
Reliance on key
online media
platforms
Competition
A failure to implement the Group’s strategy is likely to lead to the
business missing its trading targets which will have an adverse
knock-on effect on its cash flow prospects. Further, its growth
prospects could be impacted with a consequent negative impact
on shareholder value.
The Board meets regularly to monitor the path of the business
with the non-executive directors objectively challenging
the executives over the performance of the business and its
adherence to the agreed plan.
In common with all media businesses globally, the Group uses
online media platforms to market and distribute its content
which, in turn, drives consumers to its sites which enables
monetisation. Changes to the algorithms used by these Platforms
can impact on how much of the Group’s content is seen and this
will affect the eventual monetisation.
The Group has transitioned from an arbitrage model to an
organic model, reducing its reliance on the need to “boost” traffic.
In addition, it has begun to broaden its traffic sourcing more
evenly between the two largest platforms rather than being solely
reliant on one.
A new entrant into the Group’s market could divert our share
of the time our audience has to consume its content, reducing
session numbers. This would have an adverse effect on the
number of adverts the business can serve, hence reducing the
revenues the business would generate.
There is nothing the Group can do to stop new entrants. However,
it can continue to provide highly engaging content at speed
encouraging its consumers to remain engaged and loyal.
Cash flow
A significant downturn in the trading performance of the Group
would have an adverse effect on the Group’s cash reserves.
The business has substantial cash reserves, is very profitable,
has a very low capital expenditure requirement and pays close
attention to its cash flow forecasts.
Downturn in
advertising
spending
A material decline in UK mobile digital advertising spend
would have a significant impact on the Group’s revenues and
profitability. Also, technologies which may limit the Group’s ability
to effectively monetise the audience it attracts, including but
not limited to brand-safety tools and ad blockers could impact
revenue and profitability.
The Board stays abreast of market trends and advertising
forecasts and through close relationships with advertising
partners and is well informed about current and coming
developments. It has demonstrated an ability to grow
revenues during periods of significant change (including
the introduction of GDPR).
Cyber attack
A cyber attack could result in the loss of data, loss of revenue due
to service outage or loss of cash due to fraud.
As the business is a digital media business, it has an enhanced
understanding of the challenges posed by cyber fraudsters.
The business has a robust data protection policy, robust data
protection and network access controls and carries appropriate
cyber crime insurance.
Coronavirus/
COVID-19
Although continuing to ease, the COVID-19 pandemic is still
not fully over and therefore may impact advertising spending.
There is the risk of staff may become unwell and being unable
to continue to work.
The Board will continue to monitor any potential revenue
impact. As a digital publisher, the Group’s ability to reach
its audiences may not be as heavily affected as other media
properties and its sites may see increased traffic, offsetting a
proportion of any downturn.
*Q4 2020 first quarter of ownership
OF NETFLIX CHANNEL
14
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ANNUAL REPORT & ACCOUNTS 2021 | digitalbox.comANNUAL REPORT & ACCOUNTS 2021 | digitalbox.com
DIGITALBOX PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
DIGITALBOX PLC
CORPORATE AND SOCIAL RESPONSIBILITY REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
Section 172 of the Companies Act 2006 requires that the Directors act in a way that the consider, in good faith,
would most likely promote the long term success of the business taking into consideration the interests of its
shareholders and other stakeholders. The table sets out our key stakeholder groups, their interests and how the
Group engages with them.
STAKEHOLDER
WHY WE ENGAGE
HOW WE ENGAGE
Our shareholders
We maintain and value regular dialogue with our shareholders throughout the
year and place great importance on our relationship with them. We know that
our investors expect a comprehensive insight into the financial performance of
the Group, and awareness of long-term strategy and direction. As such, we aim to
provide high levels of transparency and clarity of our results and long-term strategy
and to build trust in our future plans.
Our employees
Without our employees we wouldn’t have a business. Effective employee
engagement leads to a happier, healthier workforce who are invested in the success
of the Group. We strive to address any employee concerns regarding working
conditions, health and safety, training and development, as well as workforce
diversity. Engagement with our employees starts from the top and is driven
effectively throughout the Group.
Regulatory bodies
The Group’s operations are subject to a wide range of laws, regulations, and listing
requirements including data protection, tax, employment, environmental and
health and safety legislation, along with contractual terms.
Our customers
Our relationship with our partners is collaborative and we are in constant dialogue
to provide support and analytics as required. We listen to and engage with our
customers on a regular basis to ensure that we understand their needs and can
provide solutions that address them. We work hard to ensure that customer
concerns are dealt with in a timely and professional manner.
Our suppliers
We have a number of key suppliers with whom we have built strong
relationships. We establish effective engagement channels to ensure our
relationships remain collaborative and forward focused, and to foster
relationships of mutual trust and loyalty.
• Regular reports and analysis on investors
and shareholders
• Annual Report
• Company website
• Shareholder circulars
• AGM
• RNS announcements
• Press releases
• Evaluation and feedback processes
for employees and management
• Competitive rewards packages
• Encouraging emplyee training
and development
• Compliance updates at Board Meetings
• Consistent risk review
• Company website
• RNS announcements
• Annual Report
• Direct contact with regulators
• Compliance updates at Board Meetings
• Consistent risk review
• Continual dialogue and review of feedback
from customers to ensure satisfaction
• Taking a collaborative approach to
problem solving with our suppliers
• Clear parameters are given, backed-up by
written agreements where required, to
ensure the Group and supplier’s actions
are co-ordinated
Corporate and Social Responsibility Report
The Group aims to operate ethically and be socially-
responsible in its actions. Below are a number of the
approaches through which this is achieved.
BUSINESS CONDUCT, ETHICS
AND ANTI-CORRUPTION
The Group is committed to ensuring high standards
of business conduct and has adopted policies in
support of this including an Anti-Bribery & Anti-
Corruption policy and an Equal Opportunities & Anti-
Harassment policy.
SAFEGUARDING CONSUMERS’ DATA
The Group is committed to safeguarding its
consumers’ data and only use this information where
express permission is granted and solely for the
purpose specified. The Group holds registrations with
the ICO and follows its guidelines to ensure it remains
fully compliant with GDPR.
RELATIONSHIP WITH EMPLOYEES
The Group encourages an environment of openness
and debate and welcomes all feedback from within.
Details of the Group’s performance are shared with
all employees at appropriate times via face-to-face
meetings where safe to do so, virtual meetings, email
updates and the Group’s corporate website.
The Group expects a high standard from its staff and
provides support to achieve this. Where possible, as
new roles in the organisation arise, the Group aims to
promote from within.
The Group is committed to fostering new talent and
runs a successful apprenticeship programme, often
hiring candidates into full-time roles on completion of
their apprenticeship.
The Group offers flexible working arrangements
for its staff including remote working and
part-time contracts.
16
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ANNUAL REPORT & ACCOUNTS 2021 | digitalbox.comANNUAL REPORT & ACCOUNTS 2021 | digitalbox.com
DIGITALBOX PLC
CORPORATE GOVERNANCE REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
DIGITALBOX PLC
CORPORATE GOVERNANCE REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
Corporate
Governance
18
19
ANNUAL REPORT & ACCOUNTS 2021 | digitalbox.comANNUAL REPORT & ACCOUNTS 2021 | digitalbox.com DIGITALBOX PLC
CORPORATE GOVERNANCE REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
Corporate Governance Report
DIGITALBOX PLC
CORPORATE GOVERNANCE REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
DIGITALBOX AND THE QCA CODE
Digitalbox PLC is committed to good
corporate governance and has adopted
the corporate governance guidelines of the
Quoted Companies Alliance (QCA).
This section outlines the ways in which the
Group applies the QCA’s ten principles of
corporate governance.
digital media. The Group intends to achieve this
through a buy-and-build strategy with a focus on
profitable publishing on mobile devices. This strategy
is aligned with consumer and commercial trends.
The Group will create and deliver compelling content
for its audiences via the web properties it owns now
and will own in the future. This content will engage
audiences and in turn create valuable environments
for advertisers to reach them.
1. Establish a strategy and business model which
promote long-term value for shareholders
Digitalbox aims to become a leading publisher of
The Group intends to deliver long-term value for
shareholders through its understanding of consumer
media consumption, the arising revenue opportunities
including advertising and a continued focus on the
operating profitability of its brands.
More detail on strategy can be found in the Strategic
Report starting on page 10.
2. Seek to understand and meet shareholder
needs and expectations
The Group is committed to building and maintaining
strong relationships with its shareholders and
considers the understanding of shareholder’s needs
fundamental to its success.
The Chief Executive Officer and Chief Financial
Officer are active in meeting with and preparing
presentations for institutional investors and engage in
regular dialogue with the Group’s brokers in order to
gauge shareholder sentiment.
The Group’s Annual General Meeting (AGM) is the
main forum for discussing matters with shareholders,
addressing shareholder queries and understanding
their needs and expectations. Notice of the AGM
and proposed resolutions are sent to shareholders at
least 21 days prior to the AGM. Shareholders and their
representatives are invited to fully participate and vote
in the AGM and are also given the opportunity to vote
by proxy. Voting results are published after the AGM.
Outside the AGM will Group convene general
meetings where shareholder approval is required or
James Carter
Chief Executive Officer
Jim Douglas
Chief Operating Officer
David Joseph
Chief Financial Officer
Marcus Rich
Non-Executive Chairman
Philip Machray
Non-Executive Director
Martin Higginson
Non-Executive Director
James joined Digitalbox in 2016 and is
Jim oversees editorial operations at Digitalbox
David is a law graduate and Chartered
Marcus joined Digitalbox as Chairman in
Phil joined Digitalbox as an Independent Non-
Martin is recognised as a seasoned
responsible for the strategy, direction and
and has previously held strategic and profit
Accountant, starting his career and qualifying
February 2021. Before this he was the CEO of
Executive Director in July 2021 and is
Technology, Media and Telecoms (TMT)
day-to-day running of the business. He has
responsibility for successful media brands in
with Price Waterhouse, moving into industry
TI Media for six years where he led the MBO
Chairman of the Audit Committee. He is Chief
entrepreneur. He has started, sold, and listed
a proven track record in building value in
sectors including film, music, games, sport
in steel stockholding (ASD plc) then into
of Time Inc. UK backed by private equity firm
Financial Officer of data and intelligence
numerous businesses. His first business was
the media industry, within both public and
and automotive. He has led creative teams
FMCG (Unilever plc) before entering the
Epiris in March 2018, and then the subsequent
business, Merit Group plc. Phil is a Chartered
sold to IPC Magazines in 1982. Following
limited companies. As part of the founding
in both UK and US. He started his career at
media industry in 1995 when he joined
successful £140m sale of the now named TI
Accountant with over 25 years’ experience
three years with IPC he left to set up his
executive team at Factory Media, he drove
Emap plc as a journalist and in the early 90s
Emap plc. Here he occupied several senior
Media to Future plc in April 2021. Previously
in the media sector as an advisor, Board
own publishing and telecoms business, this
the business to achieve a significant exit to
he joined start-up business Future Publishing,
financial roles within its operating companies,
he worked for Associated Newspapers in the
member and Executive. Most recently Phil
was subsequently sold to Scottish Power
Forward Internet Group. Prior to the creation
which eventually became and remains a listed
including Chief Financial Officer of Emap
roles of Commercial Director and Managing
worked for 16 years at Reach plc (formerly
plc. During his time with Scottish Power he
of Factory Media, James was NPD Director at
company. At Future, Jim held the position of
Metro, the men’s and music publications
Director Mail On Sunday. He has held several
Trinity Mirror plc) where he held roles
joined their subsidiary Scottish Telecom,
Dennis Publishing and Publishing Director
Editorial Director for 10 years with ultimate
business and Emap Advertising, the then
senior Managing Director positions for sizable
including Director of Corporate Development,
as Managing Director of their Internet and
at Emap plc where he had responsibility for
responsibility for product development.
central cross platform advertising sale
businesses in the 16 years he worked for
Chief Operating Officer of Regionals, and
Interactive division, including Internet ISP
FHM. FHM grew from a fledgling fashion
During this time Future was named UK Digital
business. On leaving in 2001 David has since
Emap plc in Publishing, TV and Advertising
Managing Director of Specialist Digital. Phil
Demon Internet. Following the flotation of
focused magazine to a global network of 32
Publisher of the Year five times.
worked exclusively within the media industry
in the UK and both the USA and Australia.
began his career at Deloitte LLP and was a
Thus plc (formerly Scottish Telecom) he left to
editions and a value at its peak of over £250m.
Board of Directors
20
on many projects including start up, MBI,
MBO, turnaround, distressed and buy and
build across a wide spectrum of enterprise
values (£1 million to £50 million) and funding
structures, internationally, both in the Far East
and in the USA.
Marcus has created significant shareholder
Director within Deloitte’s Technology, Media &
start Monstermob, a company he went on to
value in the businesses he has run across the
Telecoms practice.
media landscape.
list on AIM in 2003; growing it to a Top 50 AIM
listed business. Monstermob Group plc was
sold to Zed Worldwide in 2006. Martin has
subsequently founded Cityblock plc, a luxury
student accommodation business, NetPlayTV
plc, an interactive TV gaming business,
Digitalbox and Immotion plc. He is currently
CEO of Immotion Group plc.
21
ANNUAL REPORT & ACCOUNTS 2021 | digitalbox.comANNUAL REPORT & ACCOUNTS 2021 | digitalbox.com
DIGITALBOX PLC
CORPORATE GOVERNANCE REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
DIGITALBOX PLC
CORPORATE GOVERNANCE REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
appropriate on Group matters and may seek input
from major institutional investors from time to time in
relation to Group policy.
3. Take into account wider stakeholder and social
responsibilities and their implications for
long-term success
The Board considers the risks facing the business on
an ongoing basis and ensures mitigation strategies
are in place wherever possible. The Executive Directors
regularly keep the Board updated on current trading,
wider market trends and other developments as a
means of identifying existing and potential future
opportunities and risks.
The Group seeks to engage with its wider group of
stakeholders via:
Key risks and uncertainties facing the business are
found on page 15.
Face-to-face / virtual briefings for staff to update
on the Group’s progress and developments
Email updates for staff regarding developments
Releasing public updates via the RNS service
Stakeholder feedback being passed to Senior
Management via the relevant team member at
Digitalbox as appropriate.
The Group’s approach to this can be found on page 16.
4. Embed effective risk management,
considering both opportunities and threats,
through the organisation
5. Maintain the Board as a well-functioning,
balanced team led by the Chair
The Board comprises three Executive Directors and
three Non-Executive Directors. The Board considers all
three Non-Executive Directors to be independent.
The Board will operate in a collaborative and
constructive manner with a clear focus on the delivery
of the strategy and increasing shareholder value.
The appointment of Directors will be in accordance
with the Articles of Association.
The Board met eight times in 2021.
Details of the Board members, their roles and their
attendance at meetings can be found on pages 20
and 21.
6. Ensure that between them the Directors
have necessary up-to-date experience, skills
and capabilities
The Group considers the skills and experience of the
Board to be appropriate and this is kept under review.
The Executive Directors have each worked in
consumer media for more than twenty years, and as
a group have experience at senior management level
in respected PLC media businesses. Their specific
media expertise includes editorial management, new
product development, commercial management,
strategic planning, international expansion, financial
management, corporate restructuring, digital
transition, brand development, acquisitions and
disposals.
The Group’s non-executive Directors have extensive
successful track records in the fields of technology,
telecoms, publishing, investment banking and
television.
I
m
a
g
e
s
:
S
h
u
t
t
e
r
s
t
o
c
k
7. Evaluate Board performance based on clear
and relevant objectives, seeking continuous
improvement
The Board’s process of evaluating its own
performance, that of its Committees and the
individual Directors, is led by the Chairman.
The process is conducted by the Remuneration
Committee. The Remuneration Committee will
evaluate Board performance against targets.
9. Maintain governance structures and processes
that are fit for purpose and support good
decision-making by the Board
Targets are aligned with the delivery of the Group’s
strategy.
The Board may utilise the results of the evaluation
process when considering the adequacy of the
composition of the Board and for succession planning.
8. Promote a culture that is based on ethical
values and behaviours
The Group aims to achieve the highest ethical
standards and behaviour when conducting its
business, with integrity, fairness and equality being
high priorities.
The roles of the Chairman and the Chief Executive
Officer are separated and clearly defined. The
Chairman provides impartial leadership and guidance
to the Board. Working with the Executive Directors,
the Chairman is responsible for setting the agenda for
Board meetings and ensuring Board members receive
the information they need to properly participate in a
timely fashion.
The Chief Executive Officer is responsible for the
execution of Group strategy approved by the Board,
the leadership of the Group’s senior management
team and its employees on a day to day basis.
The Corporate and Social Responsibility report is found
on page 17.
The Chief Operating Officer supports the Chief
Executive in the delivery of the strategy with a specific
remit over editorial matters.
Board
Audit
Remuneration
Nomination
Disclosure
James Carter
Jim Douglas
David Joseph
Martin Higginson
Philip Machray
(appointed 01/07/2021)
Marcus Rich
(appointed 17/02/2021)
8/8
8/8
8/8
8/8
5/5
8/8
2/2
2/2
2/2
2/2
1/1
2/2
-
-
-
1/1
n/a
1/1
-
-
-
n/a
n/a
n/a
-
-
-
n/a
n/a
n/a
22
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ANNUAL REPORT & ACCOUNTS 2021 | digitalbox.comANNUAL REPORT & ACCOUNTS 2021 | digitalbox.com
DIGITALBOX PLC
CORPORATE GOVERNANCE REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
DIGITALBOX PLC
AUDIT COMMITTEE REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
Remuneration Committee will meet when necessary
and generates an annual remuneration report to be
approved by the members of the Company at the
annual general meeting. No Director may determine
their own remuneration. Marcus Rich acts as chairman
of the Remuneration Committee and Philip Machray
and Martin Higginson are the other members of the
Remuneration Committee.
The Remuneration Committee report is found on
page 26.
The Nomination Committee is responsible for
reviewing the structure, size and composition of
the Board based upon the skills, knowledge and
experience required to ensure the Board operates
effectively. The Nomination Committee meets when
necessary to do so. The Nomination Committee
also identifies and nominates suitable candidates
to join the Board when vacancies arise and
makes recommendations to the Board for the re-
appointment of any Non-Executive Directors. Marcus
Rich acts as chairman of the Nomination Committee
and Philip Machray and Martin Higginson are the
other members of the Nomination Committee.
The Disclosure Committee is responsible for
ensuring compliance with the AIM rules and MAR
concerning disclosure of inside information and works
closely with the Board to ensure that the Group’s
nominated adviser is provided with any information it
reasonably requests or requires in order for it to carry
out its responsibilities under the AIM Rules and the
Aim Rules for Nominated Advisers. The Disclosure
Committee approves all RNS and other significant
announcements, normally via email and will meet
as required. Marcus Rich acts as Chairman of the
Disclosure Committee. Philip Machray and Martin
Higginson are the other members of the Disclosure
Committee.
10. Communicate how the Group is governed
and is performing by maintaining a dialogue
with shareholders and other relevant stakeholders.
The Group communicates with shareholders
and other stakeholders through its Annual and
Interim Reports, regulatory and non-regulatory
announcements, its investor relations website, Annual
General Meetings and face-to-face meetings.
Further details of this can be found on page 16.
The Board has established four committees with
clearly defined responsibilities. These are as follows:
The Audit Committee’s principal functions include
ensuring that the appropriate accounting systems and
financial controls are in place, monitoring the integrity
of the financial statements of the Group, reviewing
the effectiveness of the Group’s accounting and
internal control systems, reviewing reports from the
Group’s auditors relating to the Group’s accounting
and internal controls, and reviewing the interim and
annual results and reports to Shareholders, in all cases
having due regard to the interests of Shareholders.
The Audit Committee will meet as necessary,
informed by the reporting and audit cycle or other
requirements. Philip Machray, who has recent and
relevant financial experience acts as chairman. Martin
Higginson and Marcus Rich are the other members of
the Audit Committee.
The Audit Committee report is found on page 25.
The Remuneration Committee is responsible for
determining and agreeing with the Board the
framework for the remuneration packages for
each of the Executive Directors. The Remuneration
Committee considers all aspects of the Executive
Directors’ remuneration, including pensions, bonus
arrangements, benefits, incentive payments and
share option awards, and the policy for, and scope of
any termination payments. The remuneration of the
Non-Executive Directors is a matter for the Board. The
Audit Committee Report
T he Audit Committee is responsible for
ensuring that the financial performance of
the Group is properly reported and reviewed.
It’s role includes monitoring the integrity
of the financial statements (including annual and
interim accounts and results announcements),
reviewing internal control and risk management
systems, reviewing any changes to accounting
policies, reviewing and monitoring the extent of the
non-audit services undertaken by external auditors,
and advising on the appointment of external auditors.
The Board has overall responsibility for the Group’s
system of internal financial control and for reviewing
its effectiveness. The purpose of the system of control
is to manage rather than eliminate the risk of failure
to achieve business objectives, and can only provide
reasonable, but not absolute, assurance against
misstatement or loss. The Chief Financial Officer is
the executive within the Group responsible for day-to-
day financial management of the Group’s affairs and
its internal accounting. The Group’s Chief Financial
Officer and the external auditors attend meetings of
the Audit Committee by invitation. The Committee
also holds separate meetings with the auditors
as appropriate.
2021 ACTIVITIES
The Audit Committee met twice during the year to
consider the prior year’s Annual Report and Accounts
and the current year interim financial statements.
The Committee also met with the Group’s external
auditors on 17 March 2022 prior to approving the
2021 accounts. The Committee undertook a review
and assessment of the Annual Report in order to
determine whether it could advise the Board that,
taken as a whole, the Annual Report is fair, balanced
and understandable, and provides shareholders
with the information they need to assess the Group’s
position, performance, business model and strategy.
In doing this, the Committee reviewed and discussed
the findings from the external auditors as part of the
2021 year-end audit and fully discussed the Annual
Report at the Committee meeting in March 2022.
It considered the following Significant Accounting
Judgements:
ensured clarity on the allocation of revenue across
each distinct accounting period and a clean cut off.
2. The carrying value of goodwill and other intangible
assets – the Committee considered the Group’s
approach to evaluation of the carrying value of
goodwill and other intangible assets and were
assured by the discounted cash flow model
demonstrating that no impairment charge was
required.
3. Whether the going concern basis of accounting
was appropriate, especially in the light of COVID-19 –
the Committee was assured that the business has a
strong balance sheet, is trading profitably and that,
whilst consumer advertising revenues are expected
to be under pressure during periods of economic
uncertainty, the Group’s core business has
remained resilient throughout recent difficulties.
Following a robust process, the Committee
recommended to the Board that the Annual Report
taken as a whole, is fair, balanced and understandable.
INTERNAL AUDIT
The Group does not have an internal audit function as
this is not considered appropriate given the scale of
the Group’s operations. The Audit Committee believes
that management is able to derive assurance as to the
adequacy and effectiveness of internal controls and
risk management procedures without one.
EXTERNAL AUDITORS
The Audit Committee has reviewed the independence
and effectiveness of Haysmacintyre LLP, the Group’s
external auditors, and is satisfied in both respects.
Haysmacintyre LLP’s fees in the year in respect of
audit services were £50k (2020: £51k) and in respect of
non-audit services were £nil (2020: £25k) as detailed
in note 8. Haysmacintyre LLP have signified their
willingness to continue in office and a resolution
to reappoint Haysmacintyre LLP as auditor to the
Company will be proposed at the AGM.
1.
Revenue recognition – the Committee considered
the Group’s approach to revenue recognition and
its compliance with IFRS, and concluded that the
very nature of programmatic advertising revenue
Philip Machray
Chairman of the Audit Committee
28 March 2022
24
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ANNUAL REPORT & ACCOUNTS 2021 | digitalbox.comANNUAL REPORT & ACCOUNTS 2021 | digitalbox.com
DIGITALBOX PLC
REMUNERATION COMMITTEE REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
DIGITALBOX PLC
DIRECTORS’ REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
Remuneration Committee Report
Directors’ Report
T he Remuneration Committee determines
the remuneration packages for Executive
Directors and other senior employees and
keeps the Group’s policy on pay and benefits
under review generally.
The Remuneration Committee will keep under review
the long-term incentivisation of Executive Directors
and senior employees, balancing the need to control
costs while ensuring that pay and benefits offered by
the Group are appropriate for attracting and retaining
high-calibre staff.
The Committee will continue to have due regard to
remuneration reports from independent sources, to
the guidance of its professional advisers and to good
practice generally.
The Committee agreed to pay the Chief Executive
Officer and Chief Operating Officer bonuses for the
year in line with their established agreements. The
Directors chose to use these proceeds to pay off their
outstanding company loans in full. Further detail is
disclosed in ‘Related Party transactions’ shown on
page 64.
Directors’ remuneration for the year of 2021 are shown
on page 51.
Directors’ shareholdings are set out below:
Director
Number of
1p Ordinary Shares as at
31st December 2021
%
Number of
1p Ordinary Shares as at
31st December 2020
James Carter
Jim Douglas
10,908,078
10,908,078
9.4%
9.4%
10,908,078
10,908,078
%
9.4%
9.4%
21,816,156
18.8%
21,816,156
18.8%
Total ordinary shares
116,332,457
116,332,457
Options have been granted to certain key employees under an approved EMI scheme, as below:
Option Holder
Number of Shares
Year 1
James Carter
Jim Douglas
Nick Clough
Karen Hyland
Grace Vielma
1,504,404
1,504,404
1,002,906
1,002,906
1,002,906
501,468
501,468
-
-
-
Vesting Period
Year 2
501,468
501,468
-
-
-
Year 3
501,468
501,468
1,002,906
1,002,906
1,002,906
6,017,526
1,002,936
1,002,936
4,011,654
Marcus Rich
Chairman of the Remuneration Committee
28 March 2022
T he Directors present their report and audited
financial statements for the year ended 31
December 2021.
Principal Activities
The principal activities of the Group are the
publication of consumer media through the
digital mobile channel, with revenues derived from
programmatic advertising.
The principal activity of the Company is as a holding
company.
Board of Directors
The Directors who served during the year were:
James Carter
Jim Douglas
David Joseph
Martin Higginson
Marcus Rich
(appointed 17 February 2021)
Philip Machray
(appointed 1 July 2021)
Matthew Armitage
(appointed 17 February 2021, resigned 1 July 2021)
Sir Robin Miller
(resigned 17 February 2021)
Nigel Burton
(resigned 17 February 2021)
Future Developments
The Company has chosen in accordance with section
414C(11) of the Companies Act 2006 to include the
disclosure of likely future developments in the Chief
Executive’s Statement beginning on page 4.
Dividends
No dividends were paid during the year (2020: £Nil).
The Board is not recommending the payment of
a final dividend in respect of the year ended 31
December 2021.
Earnings per Share
Earnings per share in the period from continuing
operations was 0.340p (2020: 0.198p loss) and diluted
earnings per share from continuing operations in the
period was 0.335p (2020: 0.198p loss).
Going Concern
At the time of approving the financial statements,
the Directors have a reasonable expectation that the
Company and the Group have adequate resources to
continue in operational existence for the foreseeable
future. In reaching this conclusion the Directors
have considered the financial position of the Group,
together with its forecasts and projections for two
years from the reporting date that reasonably take
into account possible changes in trading performance
that the Coronavirus may cause. The going concern
basis of accounting has therefore been adopted in
preparing the financial statements.
Treasury Operations & Financial
Instruments
The Group operates a centralised treasury function
which is responsible for managing liquidity, interest
and foreign currency risks associated with the Group’s
activities.
The Group’s principal financial instrument is cash,
the main purpose of which is to fund the Group’s
operations.
The Group has various other financial assets and
liabilities such as trade receivables and trade payables
naturally arising through from its operations.
The Group’s exposure and approach to capital and
financial risk, and approach to managing these
is set out in note 20 to the consolidated financial
statements.
Employee Engagements
The Group engages with its employees regularly
through face-to-face communication where
permitted, and virtual meeting where not during
which details of the Group’s performance is shared.
Further information regarding employee
engagement can be found in the Corporate and Social
Responsibility Report on page 17.
Employee Policies
The Group has established employment policies
which are compliant with current legislation and
codes of practice. The Group is an equal
opportunities employer.
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DIGITALBOX PLC
DIRECTORS’ REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
Directors’ Report
Directors’ Indemnity
The Company’s Articles of Association provide, subject
to the provisions of UK legislation, an indemnity for
Directors and officers of the Company in respect of
liabilities they may incur in the discharge of their
duties or in the exercise of their powers, including any
liabilities relating to the defence of any proceedings
brought against them which relate to anything done
or omitted, or alleged to have been done or omitted,
by them as officers or employees of the Company.
Appropriate directors’ and officers’ liability insurance
cover is in place in respect of all the Directors.
Directors’ Conflicts of Interest
In the event that a Director becomes aware that they,
or their connected parties, have an interest in an
existing or proposed transaction involving the Group,
they will notify the Board in writing or at the next
Board meeting.
Significant Shareholdings
As at 31 December 2021, the following shareholders
owned 3% or more of the Company:
Name
Downing Strategic Micro-Cap
Investment Trust plc
Storia Credit Holdings (Europe)
Mr James Alexander Carter
Mr James Robert Douglas
Hargreaves Lansdown
Asset Mgt (Bristol)
AJ Bell Securities (Tunbridge Wells)
Shares
24,489,795
%
21.1
19,995,798
10,908,078
10,908,078
4,140,619
17.2
9.4
9.4
3.6
3,999,914
3.4
As at 21 March 2022, the following shareholders owned
3% or more of the Company:
Name
Downing Strategic Micro-Cap
Investment Trust plc
Storia Credit Holdings (Europe)
Mr James Alexander Carter
Mr James Robert Douglas
Hargreaves Lansdown
Asset Mgt (Bristol)
AJ Bell Securities (Tunbridge Wells)
Interactive Investor (Glasgow)
Shares
%
24,489,795 20.8
19,795,798
10,908,078
10,908,078
4,814,604
16.8
9.3
9.3
4.1
3,886,885
3,558,599
3.3
3.0
Political Donations
The Group did not make any political donations
during 2021 (2020: £Nil).
Payment of Suppliers
The Group’s policy is to pay suppliers in accordance
with the relevant contractual terms between the
Group and the supplier. Where no specific terms are
agreed, the Group’s standard policy is 30 days.
Matters Covered in the Chairman’s
Statement & Financial Statements
Certain matters which are required to be disclosed in
the Directors’ Report (such as review of the business
and future developments) have been omitted as they
are included within the Chief Executive’s Statement,
the Strategic Report and within the notes to the
Financial Statements.
Annual General Meeting
The Company’s Annual General Meeting will be
announced in due course.
Statement as to Disclosure of
Information to the Auditor
As far as the Directors are aware they have each taken
all necessary steps to make themselves aware of any
relevant audit information and to establish that the
auditor is aware of that information.
This confirmation is given and should be interpreted
in accordance with the provisions of section 418 of the
Companies Act 2006.
Auditors
Haysmacintyre LLP have signified their willingness
to continue in office and a resolution to reappoint
Haysmacintyre LLP as auditor to the Company will be
proposed at the AGM.
APPROVED BY THE BOARD ON 28 MARCH 2022
AND SIGNED ON ITS BEHALF
James Carter
Chief Executive Officer
DIGITALBOX PLC
DIRECTORS’ RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2021
Directors’ Responsibilities Statement
T he Directors are responsible for preparing
the Strategic Report, Directors’ Report and
the financial statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare
financial statements for each financial year.
Under that law the Directors have elected to
prepare the financial statements in accordance with
International Financial Reporting Standards (“IFRS”) as
adopted by the United Kingdom and applicable law.
Under company law the Directors must not approve
the financial statements unless they are satisfied that
they give a true and fair view of the state of affairs of
the Company and the Group and of the profit or loss
of the Company and the Group for that period.
In preparing these financial statements, the Directors
are required to:
Financial statements are published on the Group’s
website in accordance with the rules and legislation
in the United Kingdom governing the preparation
and dissemination of financial statements, which
may vary from legislation in other jurisdictions.
The maintenance and integrity of the corporate
and financial information on the Group’s website
is the responsibility of the Directors. The Directors’
responsibility also extends to the ongoing integrity of
the financial statements contained therein.
The work carried out by the auditors does not include
consideration of the maintenance and the integrity of
the website and accordingly the auditor accepts no
responsibility for any changes that have occurred to
the financial statements when they are presented on
the website.
select suitable accounting policies and then
apply them consistently;
make judgements and accounting estimates
that are reasonable and prudent;
state whether IFRS as adopted by the United
Kingdom have been followed subject to any
material departures disclosed and explained in
the financial statements;
provide additional disclosures when compliance
with specific requirements in IFRS is insufficient
to enable users to understand the impact
of particular transactions, other events and
conditions on the Company’s and the Group’s
financial position and financial performance; and
the financial statements on the going
concern basis unless it is inappropriate to
presume that the Company and the Group will
continue in business.
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DIGITALBOX PLC
INDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS OF DIGITALBOX PLC
FOR THE YEAR ENDED 31 DECEMBER 2021
DIGITALBOX PLC
INDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS OF DIGITALBOX PLC
FOR THE YEAR ENDED 31 DECEMBER 2021
Independent Auditor’s Report
OPINION
We have audited the financial statements of
Digitalbox plc (the ‘parent company’) and its
subsidiaries (the ‘group’) for the year ended 31
December 2021 which comprise the Consolidated
Statement of Comprehensive Income, the
Consolidated and Company Statement of Changes
in Equity, the Consolidated and Company Statement
of Financial Position, the Consolidated Statement of
Cash Flows and notes to the financial statements,
including a summary of significant accounting
policies. The financial reporting framework that has
been applied in their preparation is applicable law and
UK adopted international accounting standards.
In our opinion, the financial statements:
give a true and fair view of the state of the
group’s and of the parent company’s affairs as at
31 December 2021 and of the group’s profit for
the year then ended;
have been properly prepared in accordance
with UK adopted international accounting
standards; and
have been prepared in accordance with the
requirements of the Companies Act 2006.
BASIS FOR OPINION
We conducted our audit in accordance with
International Standards on Auditing (UK) (ISAs
(UK)) and applicable law. Our responsibilities
under those standards are further described in
the Auditor’s responsibilities for the audit of the
financial statements section of our report. We are
independent of the group in accordance with the
ethical requirements that are relevant to our audit
of the financial statements in the UK, including the
FRC’s Ethical Standard as applied to listed entities, and
we have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that
the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
AN OVERVIEW OF THE SCOPE OF OUR AUDIT
As the Group comprises a parent holding company
and one trading subsidiary the scope of our work was
the audit of the financial statements of the Group
and its trading subsidiary. The scope of the audit
and our audit strategy was developed by using our
audit planning process to obtain and update our
understanding of the group and its environment,
including the group’s system of internal control, and
assessing the risks of material misstatement at the
group level. Audit work to respond to the assessed
risks was performed directly by the audit engagement
team who performed full scope audit procedures on
the parent company and the group as a whole.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our
professional judgment, were of most significance in
our audit of the financial statements of the current
period and include the most significant assessed
risks of material misstatement (whether or not due
to fraud) we identified, including those which had
the greatest effect on: the overall audit strategy, the
allocation of resources in the audit; and directing the
efforts of the engagement team. These matters were
addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on
these matters.
OUR APPLICATION OF MATERIALITY
The scope and focus of our audit were influenced by
our risk assessment and application of materiality. We
define materiality as the magnitude of misstatement
that could reasonably be expected to influence the
economic decisions of the users of the financial
statements. We use materiality to determine the
scope of our audit and the nature, timing and extent
of our audit procedures and to evaluate the effect of
misstatements, both individually and on the financial
statements as a whole.
Materiality for the financial statements as a whole
was set at £56,000, determined by reference to 5%
of group Adjusted EBITDA. We have reported to
the audit committee any corrected or uncorrected
misstatements arising exceeding £2,800. Performance
materiality was set at £42,000, being 75% of materiality.
Component materiality for the parent company
and trading subsidiary was capped at £50,400, with
reference to a benchmark of group materiality.
KEY AUDIT MATTER
HOW OUR SCOPE ADDRESSED THIS MATTER
Revenue recognition
The Group earned revenue of £3,667,000 in the year.
There is a risk that revenue is recognized inappropriately
and not in accordance with IFRS 15.
The majority of revenue is in relation to the sale of
advertising space where the risk in relation to revenue
recognition is considered to be that revenue is
understated, specifically around the year-end.
Our audit work has focused on assessing whether the revenue
recognition methods for each revenue stream utilised by management,
are in line with the applicable accounting standard IFRS 15.
We agreed the total advertising space revenue to third party customer
dashboards for the entire year and agreed a sample of revenue
recognized to cash receipts.
A selection of transactions were tested around the year-end to ensure
appropriate cut-off of revenue.
Impairment of goodwill and other intangibles
Our audit work included, but was not restricted to, the following:
The group has goodwill arising on previous acquisitions
of £9,610,000 in the balance sheet, as well as £1,018,000
of other intangible assets arising on acquisition and
£82,000 of development costs capitalised.
There is a risk that the valuation of goodwill and other
separately identifiable intangibles arising during
previous acquisitions and the new acquisition during
the year have been impaired.
Reviewing and assessing the impairment reviews prepared by
management and considering, and where appropriate challenging
the assumptions made;
Reviewing and assessing the appropriateness of future budgets and
cash flow forecasts including considering sensitivities;
Making enquiries of management and assessing expected future
performance and potential growth in the business.
CONCLUSIONS RELATING TO GOING CONCERN
In auditing the financial statements, we have
concluded that the directors’ use of the going concern
basis of accounting in the preparation of the financial
statements is appropriate.
sensitised such forecasts against various scenarios
which could come to realisation. We reviewed and
assessed management’s going concern memo and
discussed this with the Board. We considered post
balance sheet date performance and other wider
factors in concluding our assessment.
In our evaluation of the directors’ conclusions, we
considered the inherent risks to the group and
the company’s business model and reviewed the
directors’ assessment of how those risks affect
the group and the company’s financial resources
or ability to continue operations over the going
concern period. We considered the likely cash inflows
and outflows over the going concern assessment
period and assessed the risk that the group and the
company would be unable to meet their liabilities as
they fall due. We scrutinised the reasonableness of
assumptions applied to the cash flow forecasts and
Based on the work we have performed, we have not
identified any material uncertainties relating to events
or conditions that, individually or collectively, may cast
significant doubt on the group and the company’s
ability to continue as a going concern for a period
of at least twelve months from when the financial
statements are authorised for issue.
Our responsibilities and the responsibilities of the
directors with respect to going concern are described
in the relevant sections of this report.
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DIGITALBOX PLC
INDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS OF DIGITALBOX PLC
FOR THE YEAR ENDED 31 DECEMBER 2021
DIGITALBOX PLC
INDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS OF DIGITALBOX PLC
FOR THE YEAR ENDED 31 DECEMBER 2021
OTHER INFORMATION
The directors are responsible for the other information.
The other information comprises the information
included in the annual report, other than the financial
statements and our auditor’s report thereon. Our
opinion on the financial statements does not cover
the other information and, except to the extent
otherwise explicitly stated in our report, we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial
statements, our responsibility is to read the other
information and, in doing so, consider whether the
other information is materially inconsistent with the
financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated.
If we identify such material inconsistencies or
apparent material misstatements, we are required to
determine whether there is a material misstatement
in the financial statements or a material misstatement
of the other information. If, based on the work we
have performed, we conclude that there is a material
misstatement of this other information, we are
required to report that fact. We have nothing to report
in this regard.
OPINIONS ON OTHER MATTERS PRESCRIBED
BY THE COMPANIES ACT 2006
In our opinion, based on the work undertaken in the
course of the audit:
the information given in the strategic report
and the directors’ report for the financial year for
which the financial statements are prepared is
consistent with the financial statements; and
the strategic report and the directors’ report
have been prepared in accordance with
applicable legal requirements.
MATTERS ON WHICH WE ARE REQUIRED
TO REPORT BY EXCEPTION
In the light of the knowledge and understanding
of the group and the parent company and its
environment obtained in the course of the audit, we
have not identified material misstatements in the
strategic report or the directors’ report.
We have nothing to report in respect of the following
matters in relation to which the Companies Act
2006 requires us to report to you if, in our opinion:
adequate accounting records have not been
kept by the parent company, or returns adequate
for our audit have not been received from
branches not visited by us; or
the parent company financial statements are not
in agreement with the accounting records and
returns; or
certain disclosures of directors’ remuneration
specified by law are not made; or
we have not received all the information and
explanations we require for our audit.
RESPONSIBILITIES OF DIRECTORS
As explained more fully in the directors’ responsibilities
statement set out on page 29, the directors are
responsible for the preparation of the financial
statements and for being satisfied that they give a
true and fair view, and for such internal control as
the directors determine is necessary to enable the
preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors
are responsible for assessing the group’s and the
parent company’s ability to continue as a going
concern, disclosing, as applicable, matters related to
going concern and using the going concern basis
of accounting unless the directors either intend to
liquidate the group or the parent company or to cease
operations, or have no realistic alternative but to do so.
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT
OF THE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance
about whether the financial statements as a whole
are free from material misstatement, whether due
to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an
audit conducted in accordance with ISAs (UK) will
always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate,
they could reasonably be expected to influence the
economic decisions of users taken on the basis of
these financial statements.
Irregularities, including fraud, are instances of non-
compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect
of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities,
including fraud is detailed below:
EXPLANATION AS TO WHAT EXTENT THE AUDIT
WAS CONSIDERED CAPABLE OF DETECTING
IRREGULARITIES, INCLUDING FRAUD.
Based on our understanding of the company and
industry, we identified that the principal risks of
non-compliance with laws and regulations related to
regulatory requirements for the business and trade
regulations, and we considered the extent to which
non-compliance might have a material effect on the
financial statements. We also considered those laws
and regulations that have a direct impact on the
preparation of the financial statements such as the
Companies Act 2006, income tax, payroll tax and
sales tax.
We evaluated management’s incentives and
opportunities for fraudulent manipulation of the
financial statements (including the risk of override
of controls) and determined that the principal risks
were related to posting inappropriate journal entries
to revenue and management bias in accounting
estimates. Audit procedures performed by the
engagement team included:
Evaluating management’s controls designed to
prevent and detect irregularities;
Identifying and testing journals, in particular
journal entries which shared key risk
characteristics; and
Challenging assumptions and judgements
made by management in their critical
accounting estimates
A further description of our responsibilities for the
audit of the financial statements is located on the
Financial Reporting Council’s website at: www.frc.org.
uk/auditorsresponsibilities. This description forms
part of our auditor’s report.
USE OF OUR REPORT
This report is made solely to the company’s members,
as a body, in accordance with Chapter 3 of Part 16 of
the Companies Act 2006. Our audit work has been
undertaken so that we might state to the company’s
members those matters we are required to state to
them in an Auditor’s report and for no other purpose.
To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than
the company and the company’s members as a body,
for our audit work, for this report, or for the opinions
we have formed.
Jon Dawson
(Senior Statutory Auditor)
For and on behalf of Haysmacintyre LLP, Statutory Auditors
Inspecting correspondence with regulators and
tax authorities;
Discussions with management including
consideration of known or suspected
instances of non-compliance with laws and
regulation and fraud;
10 Queen Street Place
London
EC4R 1AG
Date: 28 March 2022
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DIGITALBOX PLC
FINANCIAL STATEMENTS
DIGITALBOX PLC
FINANCIAL STATEMENTS
Financial
Statements
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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2021
DIGITALBOX PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Revenue
Cost of sales
Gross profit
Administrative expenses
Other operating income
Operating profit/(loss)
Memorandum:
Adjusted EBITDA1
Depreciation
Amortisation
Share based payments
Direct costs of business combinations
Capital restructure costs
Operating profit/(loss)
Finance costs
Finance income
Profit/(loss) before taxation and attributable
to equity holders of the parent
Taxation
Profit/(loss) after tax
Note
7
8
8
10
11
Year ended
31 December
2021
£’000
Year ended
31 December
2020
£’000
3,667
(529)
3,138
(2,508)
10
640
1,029
(31)
(215)
(143)
-
-
640
(14)
1
627
(231)
396
2,187
(529)
1,658
(1,823)
24
(141)
305
(30)
(149)
(140)
(98)
(29)
(141)
(2)
-
(143)
(48)
(191)
Share
capital
£’000
Share
premium
£’000
Share
payment
based
£’000
Retained
(deficit)/
earnings
£’000
Balance at 1 January 2020
21,331
29,757
181
(39,836)
Shares issued
Share issue costs
260
-
976
(84)
Capital reduction
(20,428)
(19,500)
Equity settled share-based payments
Loss after tax
-
-
-
-
Balance at 31 December 2020
1,163
11,149
Equity settled share-based payments
Profit after tax
-
-
-
-
-
-
-
140
-
321
143
-
-
-
39,928
-
(191)
(99)
-
396
Total
equity
£’000
11,433
1,236
(84)
-
140
(191)
12,534
143
396
Balance at 31 December 2021
1,163
11,149
464
297
13,073
The notes on pages 41 to 64 form part of the group financial statements.
All profits/(losses) after taxation arise from continuing operations.
There was no other comprehensive income for 2021 (2020: £NIL).
1Adjusted EBITDA is defined as the operating profit/(loss) after adding back depreciation,
amortisation, share based payments, acquisition and listing costs, direct costs associated with
business combinations and capital restructure costs.
Gain/(loss) per share
Basic (continuing)
Gain/(loss) per share
Diluted (continuing)
£
£
0.00340
(0.00198)
0.00335
(0.00198)
12
12
The notes on pages 41 to 64 form part of the group financial statements.
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DIGITALBOX PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
FOR THE YEAR ENDED 31 DECEMBER 2021
DIGITALBOX PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2021
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
CONSOLIDATED STATEMENT OF CASH FLOWS
ASSETS
Non-current assets
Property, plant and equipment
Intangible fixed assets
Total non-current assets
Current assets
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Lease liabilities
Bank loans
Corporation tax
Total current liabilities
Non-current liabilities
Lease liabilities
Bank loans
Deferred tax liability
Total liabilities
Total net current assets
Total net assets
31 December
2021
£’000
Note
31 December
2020
£’000
13
14
15
16
17
17
17
17
17
17
19
46
10,710
10,756
1,770
2,186
3,956
14,712
(739)
(29)
(112)
(163)
(1,043)
(2)
(319)
(275)
(596)
(1,639)
2,913
13,073
1,163
11,149
464
297
13,073
19
10,839
10,858
1,047
1,853
2,900
13,758
(449)
(2)
(25)
(51)
(527)
-
(465)
(232)
(697)
(1,224)
2,373
12,534
1,163
11,149
321
(99)
12,534
Capital and reserves attributable to owners of the parent
Share capital
Share premium
Share based payment reserve
Retained earnings/(deficit)
21
23
23
23
Total equity
The financial statements were approved by the Board and authorised for issue on 28 March 2022
James Carter
CEO
David Joseph
CFO
The notes on pages 41 to 64 form part
of the group financial statements.
Cash flows from operating activities
Profit/(loss) from ordinary activities after tax
Adjustments for:
Income tax expense
Share based payments
Depreciation on property plant and equipment
Amortisation of intangible assets
Finance costs
Finance income
Cash flows from operating activities before
changes in working capital
Decrease / (increase) in trade and other receivables
Decrease in trade and other payables
Cash generated by operations
Income tax paid
Net cash from operating activities
Investing activities
Purchase of property, plant and equipment
Purchase of intangibles
Acquisition of subsidiary
Cash on acquisition
Interest received
Net cash used in investing activities
Financing activities
Finance costs
New loans and finance leases
Loan and finance lease repayments
Issue of new share capital
Costs on issue of shares
Net cash from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of the period
Cash and cash equivalents at end of the period
Year ended
31 December
2021
£’000
Year ended
31 December
2020
£’000
396
(191)
231
143
31
215
14
(1)
1,029
(723)
280
586
(76)
510
(2)
(86)
-
-
1
(87)
(4)
-
(86)
-
-
(90)
333
1,853
2,186
48
140
30
149
2
-
178
518
(205)
491
(109)
382
-
-
(841)
269
-
(572)
(2)
440
(24)
1,236
(84)
1,566
1,376
477
1,853
38
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ANNUAL REPORT & ACCOUNTS 2021 | digitalbox.comANNUAL REPORT & ACCOUNTS 2021 | digitalbox.com
DIGITALBOX PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2021
DIGITALBOX PLC
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
CONSOLIDATED STATEMENT OF CASH FLOWS (continued)
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
Reconciliation of net cash flow to movement in net funds:
1. GENERAL INFORMATION
Net increase in cash and cash equivalents
Inception of finance leases
New loans
Loans acquired in business combinations
Repayment of loans and finance leases
Movement in net funds in the year
Net funds at 1 January
Net funds at 31 December
Breakdown of net funds
Cash and cash equivalents
Lease liabilities
Bank loans
Net funds at 31 December
Year ended
31 December
2021
£000
Year ended
31 December
2020
£000
333
(56)
-
-
86
363
1,361
1,724
2,186
(31)
(431)
1,724
1,376
-
(440)
(50)
24
910
451
1,361
1,853
(2)
(490)
1,361
The notes on pages 41 to 64 form part of the group financial statements.
Digitalbox Plc is a public limited company incorporated and domiciled in the United Kingdom. The address
of the registered office 2-4 Henry Street, Bath, England, BA1 1JT. The Company is listed on AIM of the London
Stock Exchange.
The principal activity of the Group and of the Company are disclosed in the Directors’ Report.
These financial statements are presented in pounds sterling because that is the currency of the primary
economic environment in which the Group operates. Foreign operations are included in accordance with the
policies set out in note 4.
2. STANDARDS, AMENDMENTS AND INTERPRETATIONS ADOPTED IN THE
CURRENT FINANCIAL YEAR ENDED 31 DECEMBER 2021
The following IFRS standards, amendments or interpretations became effective during the year ended 31
December 2021 but have not had a material effect on this Consolidated Financial Information:
Standard
Amendments to IFRS 16: Leases (Covid-19-Related Rent Concessions)
All new standards and amendments to standards and interpretations effective for annual periods beginning
on or after 1 January 2021 that are applicable to the Group have been applied in preparing these Consolidated
Financial Statements.
3. NEW AND REVISED IFRS STANDARDS IN ISSUE BUT NOT YET EFFECTIVE
The standards and interpretations that are issued, but not yet effective, up to the date of issuance of the
Consolidated Financial Statements are disclosed below. The Group intends to adopt these standards,
if applicable, when they become effective.
Standard
Amendments to IFRS 3 Reference to the Conceptual Framework
Amendments to IAS 16 Property Plant and Equipment (Proceeds before intended use)
Amendments to IAS 37 Onerous Contracts (Cost of fulfilling a contract)
Amendments to IFRS 1, Annual Improvements to IFRS Standards 2018
2020IFRS 9, IFRS 16 and IAS 41
Disclosure of accounting policies
Amendments to IAS 1
Amendments to IAS 8 Definition of accounting estimates
Amendments to IAS 12 Deferred tax related to assets and liabilities
arising from a single transaction
Effective date
1 January 2022
1 January 2022
1 January 2022
1 January 2022
1 January 2023
1 January 2023
1 January 2023
The Directors are continuing to assess the potential impact that the adoption of the standards listed above
will have on the Consolidated Financial Statements for the year ended 31 December 2022.
4. ACCOUNTING POLICIES
Principal accounting policies
The Group is a public Group incorporated and domiciled in the United Kingdom. The principal accounting
policies applied in the preparation of these consolidated financial statements are set out
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DIGITALBOX PLC
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
DIGITALBOX PLC
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
4. ACCOUNTING POLICIES (continued)
below. These policies have been consistently applied to all the periods presented, unless otherwise stated.
Basis of preparation
The financial statements have been prepared in accordance with International Financial Reporting Standards,
International Accounting Standards and Interpretations (collectively IFRS) issued by the International
Accounting Standards Board (IASB) as adopted by the United Kingdom (“adopted IFRSs”) and those parts of
the Companies Act 2006 which apply to companies preparing their financial statements under IFRSs. The
financial statements are presented to the nearest round thousand (£’000) except where otherwise indicated.
Basis of Consolidation
The Group comprises the parent company and its subsidiaries, as detailed in note III to the company financial
statements. All of these have been included in the consolidated financial statements in accordance with the
principles of acquisition accounting as laid out by IFRS 3 Business Combinations.
Going concern
Considering the profit generated during the year of £396k (2020: loss of £191k), the Group had closing net
assets of £13,073k (2020: £12,534k), net current assets of £2,913k (2020: £2,373k) and cash at bank and in hand
of £2,186k (2020: £1,853k).
The Group generated cashflows from operating activities of £510k during the year. The Group has remained
cash generative during a difficult economic period which saw the profound impact of COVID-19.
In considering going concern, the Directors consider the current financial position and performance of the
business, as well as reviewing financial information for a period of at least 12 months from the date of approval
of the financial statements. Given the financial performance of the Group, the successful acquisition and
integration of Tab Media in 2020 and the expectations from forecast financial information, the Directors have
a reasonable expectation that the Group has adequate resources to continue in operational existence for the
foreseeable future.
The Directors believe that they can continue to mitigate the impact of COVID-19 as has been demonstrably
achieved in the year ended 31 December 2021, and accordingly continue to adopt the going concern basis in
preparing the financial statements.
Business combinations and goodwill
Acquisitions of subsidiaries and business are accounted for using the acquisition method. The assets and
liabilities and contingent liabilities of the subsidiaries are measured at their fair value at the date of acquisition.
Any excess of acquisition over fair values of the identifiable net assets acquired is recognised as goodwill.
Goodwill arising on consolidation is recognised as an asset and reviewed for impairment at least annually. Any
impairment is recognised immediately in profit or loss accounts and is not subsequently reversed. Acquisition
related costs are recognised in the income statement as incurred.
Transactions between wholly owned group members involving the hive-up or hive-across of trade and / or
assets and liabilities are outside the scope of IFRS 3 on the grounds that they represent common control
business combinations. The group has elected to apply IFRS 3 in accounting for all such transactions, which
involves a full fair value exercise at the date of the transaction. This accounting policy has been consistently
applied to all such transactions, and has been chosen on the grounds that the nature of these transactions
is the amalgamation of acquired businesses into the existing trading business, which generally takes place
shortly after the original acquisition.
Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and
the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or
receivable, excluding discounts, rebates, value added tax and other sales taxes.
The Group does not expect to have any contracts where the period between the transfer of the promised
goods or services to the customer and payment exceeds one year. As a consequence, the Company does not
adjust any of the transaction prices for the time value of money.
The Group monitors the performance obligations in accordance with IFRS 15 considering that the
performance obligations are met upon the Group delivering the advertisement to the customer.
A receivable is recognised when the services are delivered at this is the point in time that the consideration is
unconditional because only the passage of time is required before the payment is due.
Rendering of services
Revenue from providing services is recognised in the accounting period in which the services are rendered.
Revenue from the sale of advertising space is recognised upon the advertisement being generated and
the Group delivering the advertisement to the customer. The Group recognises revenue when the amount
of revenue can be reliably measured, it is probable future economic benefits will flow to the entity and the
Group has satisfied the performance obligations. Revenue is not received in advance and therefore the Group
does not account for contract liabilities.
Leases
The Group assesses whether a contract is or contains a lease, at inception of a contract. The Group recognises
a right-of-use asset and a corresponding lease liability with respect to all lease agreements in which it is the
lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of
low value assets. For these leases, the Group recognises the lease payments as an operating expense on a
straight-line basis over the term of the lease unless another systematic basis is more representative of the
time pattern in which economic benefits from the leased asset are consumed.
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily
determined, the Group uses its incremental borrowing rate. The Group assesses its discount rate using its
incremental borrowing rate.
Lease payments included in the measurement of the lease liability comprise fixed lease payments (including
in-substance fixed payments), less any lease incentives.
The lease liability is included in Payables in the Statement of Financial Position.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the
lease liability (using the effective interest method) and by reducing the carrying amount to reflect the
payments made.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments
made at or before the commencement day and any initial direct costs. They are subsequently measured at
cost less accumulated depreciation and impairment losses.
Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying
asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that
the Group expects to exercise a purchase option, the related right-of-use asset is depreciation over the useful
life of the underlying asset. The depreciation starts at the commencement date of the lease.
The right-of-use assets are included in the tangible fixed assets in the Statement of Financial Position.
The Group applies IAS 36 to determine whether a right-of-use asset is impaired and accounts any identified
impairment losses.
Foreign currency
The individual financial statements of each group company are presented in the currency of the primary
economic environment in which it operates (its functional currency). For the purpose of the consolidated
financial statements, the results and financial position of each group company are expressed in pound
sterling, which is the functional currency of the Group, and the presentational currency for the consolidated
financial statements.
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DIGITALBOX PLC
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
DIGITALBOX PLC
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
4. ACCOUNTING POLICIES (continued)
In preparing the financial statements of the individual companies, transactions in currencies other than the
individual company’s functional currency (foreign currencies) are recorded at rates of exchange prevailing on
the dates of the transactions. At the reporting date, monetary assets and liabilities that are denominated in
foreign currencies are retranslated at the rates prevailing on the reporting date. Non-monetary items carried
at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when
the fair value was determined. Non-monetary items that are measured in terms of historical cost in foreign
currency are not retranslated. Exchange differences arising on the settlement of monetary items, and on the
retranslation of monetary items, are included in profit or loss for the period. Exchange differences arising on
the retranslation of non-monetary items carried at fair value are included in profit or loss for the period except
for differences arising on the retranslation of non-monetary items in respect of which gains and losses are
recognised directly in equity. For such non-monetary items, any exchange component of the gain or loss is
also recognised directly in equity.
For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group’s
foreign operations are translated at exchange rates prevailing on the reporting date. Income and expense
items are translated at the average exchange rates for the period, unless exchange rates fluctuate
significantly during the period, in which case the exchange rates at the date of transactions are used.
Exchange differences arising, if any, are classified as equity and transferred to the Group’s translation reserve.
Such translation differences are recognised as income and expense in the period in which the operation is
disposed of. Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as
assets and liabilities of the foreign entity and translated at the closing rates.
Intangible assets
Intangible assets include goodwill arising on the acquisition of subsidiaries and represents the difference
between the fair value of the consideration payable and the fair value of the net assets that have been
acquired. The residual element of Goodwill is not being amortised but is subject to an annual impairment
review.
evidence that the Group will not be able to collect all amounts due. The amount of any provision is recognised
in profit or loss.
The Group always recognises lifetime expected credit losses (ECL) for trade receivables and amounts due
on contracts with customers. The expected credit losses on these financial assets are estimated based
on the Group’s historical credit loss experience, adjusted for facts that are specific to the debtors, general
economic conditions and an assessment of both the current as well as the forecast director of conditions at
the reporting date, including time value of money where appropriate. Lifetime ECL represents the expected
credit losses that will result from all possible default events over the expected life of a financial instrument.
Cash and cash equivalents
Cash and cash equivalents are recognised as financial assets. They comprise cash held by the Group and
short-term bank deposits with an original maturity date of three months or less.
Trade payables
Trade payables are initially recognised as financial liabilities measured at fair value, and subsequent to initial
recognition measured at amortised cost.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after
deduction of all its liabilities. Equity instruments issued by the Group are recorded at the proceeds received
net of direct issue costs.
Share based payments
Where share options are awarded to employees, the fair value of the options at the date of grant is charged to
the statement of comprehensive income on a straight-line basis over the vesting period.
Non-market vesting conditions are taken into account by adjusting the number of options expected to vest at
each statement of financial position date so that, ultimately, the cumulative amount recognised
Also included within intangible assets are various assets separately identified in business combinations (such
as brand value) to which the Directors have ascribed a fair value and a useful economic life. The ascribed value
of these intangible assets is being amortised on a straight-line basis over their estimated useful economic life,
which is considered to be 7 years.
Share based payments (continued)
over the vesting period is based on the number of options that eventually vest. Market vesting conditions
are factored into the fair value of the options granted. The cumulative expense is not adjusted for failure to
achieve a market vesting condition.
Intangible assets (continued)
Other intangible assets purchased by the Group are initially recognised at cost. After recognition, under the
cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated
impairment losses. Amortisation is recognised so as to write off the cost less their residual values over their
useful lives, which is considered to be 3 years straight line.
Financial instruments
The Group classifies financial instruments, or their component parts, on initial recognition as a financial asset,
a financial liability or an equity instrument.
Contract liabilities
Contract liabilities comprise payments in advance of revenue recognition and revenue deferred due to
contract performance obligation not being completed. They are classified as current liabilities if the contract
performance obligations payments are due to be completed within one year or less (or in the normal
operating cycle of the business if longer). If not, they are presented as non-current liabilities. Contract liabilities
are recognised initially at fair value and subsequently at amortised cost.
Fair value is calculated using the Black-Scholes model, details of which are given in note 22.
Pensions
The pension schemes operated by the Group are defined contribution schemes. The pension cost charge
represents the contributions payable by the Group.
Property, plant and equipment
Property, plant and equipment are stated at cost net of accumulated depreciation and provision for
impairment. Depreciation is provided on all property plant and equipment, at rates calculated to write off
the cost less estimated residual value, of each asset on a straight-line basis over its expected useful life. The
residual value is the estimated amount that would currently be obtained from disposal of the asset if the
asset were already of the age and in the condition expected at the end of its useful economic life.
The method of depreciation for each class of depreciable asset is:
Office equipment
Right-of-Use asset
- 25% reducing balance
- over term of lease
Trade and other receivables
Trade and other receivables are measured at initial recognition at fair value, and subsequently measured
at amortised cost using the effective interest method. A provision is established when there is objective
Impairment of Assets
Impairment tests on goodwill are undertaken annually at the balance sheet date. The recoverable value of
goodwill is estimated on the basis of value in use, defined as the present value of the cash generating units
44
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DIGITALBOX PLC
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
DIGITALBOX PLC
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
4. ACCOUNTING POLICIES (continued)
5. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
with which the goodwill is associated. This is computed by applying an appropriate discount rate to the
estimated value of future cashflows. When value in use is less than the book value, an impairment is
recorded and is irreversible.
Other non-financial assets are subject to impairment tests whenever circumstances indicate that their
carrying amount may not be recoverable. Where the carrying value of an asset exceeds its estimated
recoverable value (i.e. the higher of value in use and fair value less costs to sell), the asset is written down
accordingly. Where it is not possible to estimate the recoverable value of an individual asset, the impairment
test is carried out on the asset’s cash-generating unit. The carrying value of property, plant and equipment
is assessed in order to determine if there is an indication of impairment. Any impairment is charged to the
statement of comprehensive income. Impairment charges are included under administrative expenses
within the consolidated statement of comprehensive income.
Taxation and deferred taxation
Corporation tax payable is provided on taxable profits at prevailing rates.
Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the
balance sheet differs from its tax base, except for differences arising on:
the initial recognition of goodwill; and
the initial recognition of an asset or liability in a transaction which is not a business combination and at the
time of the transaction affects neither accounting nor taxable profit.
Recognition of deferred tax assets is restricted to those instances where it is probable that future taxable
profit will be available against which the asset can be utilised. The amount of the asset or liability is
determined using tax rates that have been enacted or substantively enacted by the balance sheet date and
are expected to apply when the deferred tax liabilities/(assets) are settled/(recovered).
Deferred tax assets and liabilities are offset when the Group has a legally enforceable right to offset current tax
assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority
on either:
the same taxable Group company; or
different Group entities which intend either to settle current tax assets and liabilities on a net basis, or to
realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts
of deferred tax assets or liabilities are expected to be settled or recovered.
Segmental reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the
Executive Directors, who are responsible for allocating resources and assessing performance of the operating
segments.
A business segment is a group of assets and operations, engaged in providing products or services that are
subject to risks and returns that are different from those of other operating segments.
A geographical segment is engaged in providing products or services within a particular economic
environment that are subject to risks and returns that are different from those of segments operating in
other economic environments. The Executive Directors assess the performance of the operating segments
based on the measures of revenue, profit before taxation and profit after taxation. Central overheads are not
allocated to business segments.
Government grants
Government grants are recognised when there is reasonable assurance that the grant conditions will be met
and the grants will be received, and are recognised as a separate component of other operating income,
rather than being offset against the costs to which they relate.
In the application of the Group’s accounting policies, which are described in note 4, the Directors are required
to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are
not readily apparent from other sources. The estimates and associated assumptions are based on experience
and other factors considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision affects only that period,
or in the period of the revision and future periods if the revision affects both current and future periods.
The following are the critical judgements and estimations that the Directors have made in the process
of applying the Group’s accounting policies and that have the most significant effect on the amounts
recognised in the financial statements.
Critical accounting judgements
Impairment of goodwill
Impairment of the valuation of the goodwill relating to the acquisition of cash generating units is considered
annually for indicators of impairment to ensure that the asset is not overstated within the financial
statements. The annual impairment assessment in respect of goodwill requires estimates of the value in use
(or fair value less costs to sell) of cash generating units to which goodwill has been allocated.
This requires the Directors to estimate the future cash flows and an appropriate discount factor, in order
that the net present value of those cash flows can be determined. Discounted cash flow forecasts give due
consideration to the impact of COVID-19 on the future cash flows, and are stress tested under a range of
scenarios. In all instances, the headroom is sufficient to satisfy the Directors that there are no indicators of
impairment based on circumstances that were present or could be reasonably foreseen at the reporting date.
Critical accounting Estimates
Amortisation of intangible assets
The periods of amortisation adopted to write down capitalised intangible assets requires judgements to
be made in respect of estimating the useful lives of the intangible assets to determine an appropriate
amortisation rate. Development costs (domain names and website costs) are being amortised on a straight-
line basis over the period during which the economic benefits are expected to be received, which has been
estimated at 3 years. Intangible assets recognised in relation to the brand names are being amortised
straight-line over 7 years.
Depreciation
The useful economic lives of tangible fixed assets are based on management’s judgement and experience.
When management identifies that actual useful economic lives differ materially from the estimates used to
calculate depreciation, that charge is adjusted retrospectively.
Share based payment expense
Non-market performance and service conditions are included in the assumptions about the number of
options that are expected to vest. At the end of each reporting period the Group revises its estimates of the
number of options that are expected to vest based on the non-market vesting conditions. It recognises
the impact of the revision to the original estimates, if any, in the consolidated statement of comprehensive
income, with a corresponding adjustment to equity.
This requires a judgement as to how many options will meet the future vesting criteria as well as the
judgements required in estimating the fair value of the options.
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DIGITALBOX PLC
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
DIGITALBOX PLC
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
5. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)
2020
IFRS 16 discount rates
The Group estimates an appropriate discount rate based on an incremental rate of borrowing for the
calculation of the IFRS 16 right-of-use assets. This requires judgement as to an appropriate discount rate.
Provision for bad and doubtful debts
The Group applies the IFRS 9 simplified approach to measuring expected credit losses using a lifetime
expected credit loss provision for trade receivables. To measure expected credit losses on a collective basis,
trade receivables are grouped based on similar ageing. The expected loss rates are based on the Group’s
historical credit losses experience over the twelve month period prior to the period end. Forward looking
issues have been considered, including in relation to the ongoing impact of the COVID-19 pandemic. This has
had an immaterial effect on the expected credit loss rate.
6. SEGMENTAL INFORMATION
Revenue
Cost of sales
Administrative expenses*
Other operating income
Adjusted EBITDA
Amortisation
Depreciation
Acquisition costs
Capital restructure costs
Share based payments
Finance costs
Tax
Entertainment
Daily
£’000
Mashed
Productions
£’000
1,641
(307)
(447)
-
887
-
-
-
-
-
-
-
334
(192)
(40)
-
102
-
-
-
-
-
-
-
The
Tab
£’000
208
(30)
(71)
-
107
-
-
-
-
-
-
-
Head
Office
£’000
4
-
(819)
24
(791)
(149)
(30)
(98)
(29)
(140)
(2)
(48)
A segmental analysis of revenue and expenditure is as follows:
Profit/(loss) for the year
887
102
107
(1,287)
Total
2020
£’000
2,187
(529)
(1,377)
24
305
(149)
(30)
(98)
(29)
(140)
(2)
(48)
(191)
2021
Revenue
Cost of sales
Administrative
expenses*
Other operating income
Adjusted EBITDA
Amortisation
Depreciation
Share based payments
Finance income
Finance costs
Tax
Entertainment
Daily
£’000
Mashed
Productions
£’000
2,463
(205)
(474)
-
1,784
-
-
-
-
-
-
308
(171)
(86)
-
51
-
-
-
-
-
-
51
Profit/(loss) for the year
1,784
The
Tab
£’000
896
(153)
(287)
-
456
-
-
-
-
-
-
Head
Office
£’000
-
-
(1,272)
10
(1,262)
(215)
(31)
(143)
1
(14)
(231)
Total
2021
£’000
3,667
(529)
(2,119)
10
1,029
(215)
(31)
(143)
1
(14)
(231)
456
(1,895)
396
*Administrative expenses exclude depreciation, amortisation, share based payments and acquisition and listing costs.
The segmental analysis above reflects the parameters applied by the Board when considering the Group’s monthly
management accounts.
External revenue by location
of customer
Total assets by location
Net tangible capital
expenditure by location
31 December
2021
Continuing
£’000
31 December
2020
Continuing
£’000
1,683
665
1,319
3,667
1,024
704
459
2,187
31 December
2021
31 December
2020
31 December
2021
31 December
2020
£’000
14,205
141
366
14,712
£’000
£’000
£’000
13,475
103
180
13,758
58
-
-
58
-
-
-
-
United Kingdom
Europe
Rest of World
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DIGITALBOX PLC
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
DIGITALBOX PLC
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
7. REVENUE
Revenue by stream is split:
Advertising
Revenue by location is split:
United Kingdom
Europe
Rest of world
2021
£’000
3,667
3,667
1,683
665
1,319
3,667
2020
£’000
2,187
2,187
1,024
594
569
2,187
The Group had three customers whose revenue individually represented 10% or more of the
Group’s total revenue, being 21.1%, 15.0% and 11.5% respectively.
9. STAFF COSTS
Staff costs for all employees, including Directors consist of:
Wages and salaries
Social security costs
Pensions
Share based payment charge
The average number of employees of the group:
during the year was as follows
Directors
Management and administration
Content
2021
£’000
1,284
101
14
1,399
143
1,542
2020
£’000
838
90
10
938
140
1,078
2021
Number
2020
Number
6
3
20
29
6
3
11
20
8. PROFIT/LOSS FROM OPERATIONS
Directors’ Detailed Emoluments
This is arrived at after charging/(crediting):
Continuing operations:
Staff costs (see note 9)
Direct costs of business combinations
Depreciation of property, plant & equipment
Amortisation of intangible fixed assets
Foreign exchange differences
Government grants
Auditors’ remuneration in respect of the Company
Audit of the Group and subsidiary undertakings
Auditors’ remuneration – corporate finance fees
2021
£’000
1,584
-
31
215
17
(10)
18
34
-
52
2020
£’000
1,078
98
30
149
(27)
(24)
18
33
25
76
In 2021, government grants of £10k (2020: £24k) were received as part of the Government’s initiatives to provide
immediate financial support as a result of the COVID-19 pandemic. There are no future related costs associated
with these grants which were received solely as compensation for costs incurred in the year.
Details of individual Directors’ emoluments for the year are as follows:
Salary
2021
£’000
Consultancy
2021
£’000
Bonus
2021
£’000
Pension
2021
£’000
Total
2021
£’000
Total
2020
£’000
N Burton
(resigned 17 February 2021)
J Carter
J Douglas
M Higginson
D Joseph
R Miller
(resigned 17 February 2021)
M Armitage
(resigned 1 July 2021)
P Machray
(joined 1 July 2021)
M Rich
(joined 17 February 2021)
Total
3
127
127
-
41
3
13
**13
***30
357
-
-
-
25
-
11
-
-
-
36
-
*160
*160
-
-
-
-
-
-
320
-
1
1
-
-
-
-
-
-
2
3
288
288
25
41
14
13
13
30
25
128
128
25
41
35
-
-
-
715
382
*100% of net proceeds from bonus payment used to repay the directors company loans.
**annual salary is £25k p.a.
***annual salary is £35k p.a.
50
51
ANNUAL REPORT & ACCOUNTS 2021 | digitalbox.comANNUAL REPORT & ACCOUNTS 2021 | digitalbox.com
DIGITALBOX PLC
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
DIGITALBOX PLC
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
9. STAFF COSTS (continued)
10. FINANCE COSTS
All pension contributions represent payments into defined contribution schemes.
The Executive Directors have service contracts with the Company which are terminable by the Company or
relevant director after a fixed term of 12 months followed by 6 months’ notice.
The Directors’ interests in the issued ordinary share capital of the Company was as follows:
Interest on lease liabilities
Bank charges and interest payable
Interest on bank loans
2021
£’000
2
-
12
14
2020
£’000
1
1
-
2
Shares of £0.01
31/12/2021
Shares of £0.01
31/12/2020
James Carter
James Douglas
10,908,078
10,908,078
9.4%
9.4%
10,908,078
10,908,078
9.4%
9.4%
The share based payment charge attributable to these options during the year amounted to
£100k (2020: £100k).
Details of the EMI options over the Company’s shares held by the directors are as follows:
11. TAXATION ON PROFIT/LOSS FROM ORDINARY ACTIVITIES
Corporation tax – current period
Corporation tax – adjustment in respect of prior periods
Deferred tax – current period
Deferred tax – adjustments in respect of prior periods
Tax credit/(charge) for the year
2021
£’000
165
24
27
15
231
2020
£’000
50
12
(14)
-
48
Type of Option
Options held at 31
December 2021
Exercise price £
Date of grant
Exercise period
The tax assessed for the year differs from the standard rate of corporation tax in the UK applied to loss before tax.
James Carter
James Douglas
EMI option
EMI option
1,504,404
1,504,404
0.14
0.14
28 February 2019 28 February 2022
28 February 2019 28 February 2022
In addition, effective options in Digitalbox plc exist due to three directors having warrants in its subsidiary company, Digitalbox
Publishing (Holdings) Limited, which, when exercised, are satisfied by issuing shares in Digitalbox plc.
These are set out in the table, below;
‘Effective Option’ Holder
Number of Shares
James Carter
Jim Douglas
Martin Higginson
681,958
681,958
1,590,936
2,954,852
Total profit/(loss) on ordinary activities before tax
Profit/(loss) on ordinary activities at the standard
rate of corporation tax in the UK of 19% (2020: 19%)
Effects of:
Expenses not deductible for tax purposes
Income not taxable
Adjustments to prior periods
Deferred tax not recognised – loss relief in current period
Effect of changes in tax rates on deferred tax
Tax credit for the year
2021
£’000
627
119
30
-
39
(23)
66
231
2020
£’000
(143)
(27)
46
(1)
15
-
15
48
The warrants had vested prior to admission onto AIM on 28 February 2019 and carry an effective exercise price of
2.28 pence per share issued in Digitalbox plc. On 16 February 2022 Martin Higginson exercised his warrants in full.
This is noted as a post balance sheet event at note 27.
Further information on share options is included in note 22.
The market price of the shares at 31 December 2021 was 8.70p with a quoted range from throughout 2021 of 5.25p
to 9.25p. The EMI options vest based on performance criteria detailed in note 22.
In the Budget on 3 March 2021, the Chancellor announced the intention to increase the main rate of UK
corporation tax to 25% for the financial year beginning 1 April 2023. This was substantively enacted on 24 May
2021. Deferred tax at the balance sheet date has therefore been measured using the newly enacted tax rate of
25% (2020: 19%) in these financial statements.
There were unused tax losses at 31 December 2021 amounting to £3,434k. In the majority, these were restricted
for use for 5 years against future taxable profits arising from the trade formerly carried on in Tab Media Limited
and now carried on in Digitalbox Publishing Limited. No deferred tax asset has been recognised owing to
materiality in the short term.
52
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ANNUAL REPORT & ACCOUNTS 2021 | digitalbox.comANNUAL REPORT & ACCOUNTS 2021 | digitalbox.com
DIGITALBOX PLC
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
DIGITALBOX PLC
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
12. EARNINGS PER SHARE
The earnings per share is based on the following:
2021
£’000
2020
£’000
13. TANGIBLE FIXED ASSETS (continued)
Information about the Right-of-Use assets is summarised below:
Continuing earnings post tax attributable to shareholders
396
(191)
Basic weighted average number of shares
Diluted weighted average number of shares
116,332,457
118,297,010
96,425,598
96,425,598
Net Book Value
Property
2021
£’000
31
31
Depreciation charge in respect of the Right-of-Use asset is as follows:
Basic earnings per share (£)
Diluted earnings per share (£)
0.00340
0.00335
(0.00198)
(0.00198)
Property
Earnings/(Loss) per ordinary share has been calculated using the weighted average number of shares in issue during the relevant
financial periods. IAS 33 requires presentation of diluted EPS when a company could be called upon to issue shares that would decrease
earnings per share or increase the loss per share. The exercise price of the outstanding share options has been tracked against the
quoted share price of the business from time to time during the year, and taken into account in the calculation of diluted EPS.
2021
£’000
27
27
13. TANGIBLE FIXED ASSETS
14. INTANGIBLE FIXED ASSETS
2020
£’000
2
2
2020
£’000
23
23
Cost
Balance at 1 January 2020 and 1 January 2021
Additions
Disposals
Balance at 31 December 2021
Accumulated depreciation
Balance at 1 January 2020
Depreciation charge
Balance at 1 January 2021
Depreciation charge
Depreciation eliminated on disposal
Balance at 31 December 2021
Net Book Value
At 31 December 2021
At 31 December 2020
At 31 December 2019
IFRS 16
Right-of-Use
Asset
£’000
Office
equipment
Total
£’000
£’000
33
56
(33)
56
8
23
31
27
(33)
25
31
2
25
27
2
-
29
3
7
10
4
-
14
15
17
24
60
58
(33)
85
11
30
41
31
(33)
39
46
19
49
The net book value of owned and leased assets included as “Property, plant and equipment”
in the Statement of Financial Position is as follows:
Tangible fixed assets owned
Right-of-Use tangible fixed assets
2021
£’000
15
31
46
2020
£’000
17
2
19
GROUP
Cost
Balance at 1 January 2020
Additions
Balance at 1 January 2021
Additions
Balance at 31 December 2021
Accumulated amortisation
Balance at 1 January 2020
Amortisation
Balance at 1 January 2021
Amortisation
Balance at 31 December 2021
Net Book Value
At 31 December 2021
At 31 December 2020
At 31 December 2019
Goodwill
Arising on
Consolidation
£’000
Other
Intangible
Assets
£’000
Development
costs
Total
£’000
£’000
9,492
118
9,610
-
9,610
-
-
-
-
-
9,610
9,610
9,492
854
622
1,476
-
1,476
102
145
247
211
458
1,018
1,229
752
35
-
35
86
121
31
4
35
4
39
82
-
4
10,381
740
11,121
86
11,207
133
149
282
215
497
10,710
10,839
10,248
Amortisation is charged to administrative expenses in the Statement of Comprehensive Income.
54
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ANNUAL REPORT & ACCOUNTS 2021 | digitalbox.comANNUAL REPORT & ACCOUNTS 2021 | digitalbox.com
DIGITALBOX PLC
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
DIGITALBOX PLC
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
14. INTANGIBLE FIXED ASSETS (continued)
15. TRADE AND OTHER RECEIVABLES
GOODWILL AND IMPAIRMENT
The carrying value of goodwill in respect of each cash generating unit is as follows:
Digitalbox Publishing (Holdings) Limited
Mashed Productions Limited
Tab Media Limited
31 December
2021
£’000
31 December
2020
£’000
9,171
321
118
9,610
9,171
321
118
9,610
The Group is obliged to test goodwill annually for impairment, or more frequently if there are indications that
goodwill and indefinite life intangibles might be impaired, due to the goodwill deemed to have an indefinite
useful life. In order to perform this test, management is required to compare the carrying value of the relevant
cash generating unit (“CGU”) including the goodwill with its recoverable amount. The recoverable amount of the
CGU is determined from a value in use calculation. It is considered that any reasonably possible changes in the
key assumptions would not result in an impairment of the present carrying value of the goodwill.
Digitalbox Publishing (Holdings) Limited
The recoverable amount of Digitalbox Publishing (Holdings) Limited relates to the Entertainment Daily
segment and has been determined from a review of the current and anticipated performance of this unit. In
preparing this projection, a discount rate of 7% has been used based on the weighted average cost of capital
and a future growth rate of 3% has been assumed. It has been assumed investment in capital equipment will
equate to depreciation over the year. The discount rate was based on the Group’s cost of capital as estimated
by management. After applying sensitivity analysis in respect of the results and future cash flows, in particular
for presumed growth rates and discount rates, management is satisfied that it is highly improbable that such a
change in key assumptions would reduce the recoverable amount below book value.
Mashed Productions Limited
The recoverable amount of Mashed Productions Limited has been determined with reference to the trade and
assets hived across to Digitalbox Publishing Limited in the prior year, which continues to benefit from cash
inflows through Mashed Productions. The recoverable amount has been determined from a review of the current
and anticipated performance of this unit. In preparing this projection, a discount rate of 7% has been used based
on the weighted average cost of capital and a future growth rate of 3% has been assumed. It has been assumed
investment in capital equipment will equate to depreciation over the year. The discount rate was based on the
Group’s cost of capital as estimated by management. After applying sensitivity analysis in respect of the results
and future cash flows, in particular for presumed growth rates and discount rates, management is satisfied that
it is highly improbable that such a change in key assumptions would reduce the recoverable amount below book
value.
Tab Media Limited
The recoverable amount of the Tab Media segment, which was hived up from Tab Media Limited to Digitalbox
Publishing Limited on 1 October 2020, has been determined from a review of the current and anticipated
performance of this unit. In preparing this projection, a discount rate of 7% has been used based on the weighted
average cost of capital and a future growth rate of 3% has been assumed. It has been assumed investment in
capital equipment will equate to depreciation over the year. The discount rate was based on the Group’s cost
of capital as estimated by management. After applying sensitivity analysis in respect of the results and future
cash flows, in particular for presumed growth rates and discount rates, management is satisfied that it is highly
improbable that such a change in key assumptions would reduce the recoverable amount below book value.
Trade receivables
Prepayments and accrued income
Other receivables
16. CASH AND CASH EQUIVALENTS
Cash at bank and in hand
17. LIABILITIES
Current liabilities
Trade payables
Social security and other taxes
Accruals
Lease liabilities
Other payables
Bank loans
Corporation tax payable
Non-current liabilities
Lease liabilities
Bank loans
31 December 2021
£’000
31 December 2020
£’000
1,428
104
238
1,770
758
42
247
1,047
31 December 2021
£’000
31 December 2020
£’000
2,186
2,186
1,853
1,853
31 December 2021
£’000
31 December 2020
£’000
86
144
508
29
1
112
163
1,043
2
319
321
84
209
146
2
10
25
51
527
-
465
465
56
57
ANNUAL REPORT & ACCOUNTS 2021 | digitalbox.comANNUAL REPORT & ACCOUNTS 2021 | digitalbox.com
DIGITALBOX PLC
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
DIGITALBOX PLC
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
18. LOANS
20. FINANCIAL RISK MANAGEMENT
Bank loans
Due in less than one year
Due in between one and two years
Due in between two and five years
31 December
2021
£’000
112
122
197
431
31 December
2020
£’000
25
122
343
490
On 7 October 2020, Digitalbox Publishing Limited drew down a loan facility amounting to £450k under the CBILS
scheme. The present value of the loan at inception discounted at a market rate of interest was £440k. The loan
is for a term of five years and is repayable in equal monthly instalments which commenced in 2021. Interest is
charged at a fixed rate of 2.43% per annum, with the cost being fully subsidised by central Government for the first
12 months. The loan is secured by a debenture over the assets of the Digitalbox Publishing Limited and a £450k
guarantee granted by Digitalbox plc. The outstanding balance at 31 December 2021 was £431k (2020: £440k).
Tab Media Limited had an outstanding loan amounting to £50k at 31 December 2020. This loan was repaid in
full during the year.
The Group is exposed to risks that arise from its use of financial instruments. These financial instruments are
within the current assets and current liabilities shown on the face of the statement of financial position and
comprise the following:
Credit risk
The Group is exposed to credit risk primarily on its trade receivables. The Group maintains its cash
reserves at a reputable bank. It is group policy to assess the credit risk of each new customer before entering
into binding contracts.
The maximum exposure to credit risk is represented by the carrying value in the statement of financial position.
The credit risk on liquid funds is low as the funds are held at a bank with a high credit rating assigned by
international credit agencies.
Current financial assets
Trade receivables
Other receivables
Cash and cash equivalents
19. DEFERRED TAX
The table below illustrates the due date of trade receivables:
Balance at 1 January 2021
Deferred tax charge for the year
Balance at 31 December 2021
The deferred tax provision comprises:
Intangible asset timing differences
The expected net reversal of deferred tax in 2022 is £53k.
Total
£’000
232
43
275
31 December
2021
£’000
31 December
2020
£’000
275
275
232
232
Current
31 – 60 days
61 – 90 days
91 – 120 days
121 and over
The table below illustrates the geographical location of trade receivables:
United Kingdom
Europe
Rest of world
31 December
2021
£’000
31 December
2020
£’000
1,428
238
2,186
3,852
758
247
1,853
2,858
31 December
2021
£’000
31 December
2020
£’000
577
421
267
126
37
1,428
278
265
202
10
3
758
31 December
2021
£’000
31 December
2020
£’000
921
141
366
1,428
475
180
103
758
58
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ANNUAL REPORT & ACCOUNTS 2021 | digitalbox.comANNUAL REPORT & ACCOUNTS 2021 | digitalbox.com
DIGITALBOX PLC
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
DIGITALBOX PLC
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
20. FINANCIAL RISK MANAGEMENT (continued)
The directors have considered expected credit losses under IFRS9 and have adopted the simplified approach to their evaluation as
the Group has limited exposure to them. The Directors have provided for expected credit losses on a specific basis and this has led to
the Group carrying a provision against trade debtors of £28k (2020: £21k).
Liquidity risk
Liquidity risk arises from the Group’s management of working capital and the finance charges and repayments of its liabilities.
The Group’s policy is to ensure that it will have sufficient cash to allow it to meet its liabilities when they become due and so cash
holdings may be high during certain periods throughout the period.
The Group’s policy in respect of cash and cash equivalents is to limit its exposure by reducing cash holding in the operating units and
investing amounts that are not immediately required in funds that have low risk and are placed with a reputable bank.
Cash at bank and cash equivalents
31 December
2021
£’000
31 December
2020
£’000
At the year end the Group had the following cash balances:
2,186
1,853
Cash at bank comprises Sterling and US Dollar cash deposits.
All monetary assets and liabilities within the group are denominated in the functional currency of the operating unit in which they
are held. All amounts stated at carrying value equate to fair value.
The table below shows the maturities of financial liabilities:
2021
Trade payables
Accruals
Lease liabilities
Loans
Other payables
2020
Trade payables
Accruals
Lease liabilities
Loans
Other payables
Carrying amount 6 months or less
£’000
£’000
6-12 months
£’000
1 or more year
£’000
86
508
31
431
1
1,057
85
508
14
56
1
664
1
-
15
56
-
72
-
-
2
319
-
321
Carrying amount 6 months or less
£’000
£’000
6-12 months
£’000
1 or more year
£’000
84
147
2
490
10
733
84
142
2
-
10
238
-
5
-
25
-
30
-
-
-
465
-
465
31 December
2021
£’000
31 December
2020
£’000
Capital Disclosures and Risk Management
The Group’s management define capital as the Group’s equity share capital and reserves.
Financial liabilities at amortised cost
Trade payables
Accruals
Lease liabilities
Bank loans
Other payables
The table below illustrates the maturities of trade payables:
Current
31 – 60 days
61 – 90 days
91 – 120 days
121 and over
86
508
31
431
1
1,057
84
147
2
490
10
733
31 December
2021
£’000
31 December
2020
£’000
45
28
12
-
1
86
69
5
-
-
10
84
The Group’s objective when maintaining capital is to safeguard its ability to continue as a going concern, so that in
due course it can provide returns for shareholders and benefits for other stakeholders.
The Group manages its capital structure and makes adjustments to it in the light of changes in the business and in
economic conditions. In order to maintain or adjust the capital structure, the Group may from time to time issue new
shares, based on working capital and product development requirements and current and future expectations of the
Company’s share price.
Share capital is used to raise cash and as direct payments to third parties for assets or services acquired.
Market risk
Interest rate risk
Interest rate risk is the risk that the value of financial instruments will fluctuate due to changes in market interest
rates. The Group considers the interest rates available when deciding where to place cash balances.
Foreign currency risk
Foreign exchange transaction risk arises when individual Group operations enter into transactions denominated in
a currency other than the functional currency. The principal risk arises from the Group’s US based subsidiary, Èw Inc.
The general policy for the Group is to sell to customers in the same currency that services or goods are purchased in,
reducing the transactional risk.
60
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ANNUAL REPORT & ACCOUNTS 2021 | digitalbox.comANNUAL REPORT & ACCOUNTS 2021 | digitalbox.com
DIGITALBOX PLC
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
DIGITALBOX PLC
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
21. SHARE CAPITAL
23. RESERVES
No.
31 December
2021
Value
£’000
No.
31 December
2020
Called up share capital
Allotted, called up and fully paid
Ordinary shares of £0.01 each
116,332,457
116,332,457
1,163
1,163
116,332,457
116,332,457
Value
£’000
1,163
1,163
22. SHARE BASED PAYMENTS
During the year, the Group incurred a £143k share based payment charge (2020: £140k). Of this total, £100k
(2020: £101k) was recorded as an expense in Digitalbox plc and £43k (2020: £39k) was recorded as an expense in
Digitalbox Publishing Limited.
2021
No. of
share
options
8,298,757
1,002,906
-
(160,000)
Weighted
average
exercise
price
8.19p
6.00p
-
20.00p
2020
No. of
share
options
8,298,757
2,005,812
(2,005,812)
-
Outstanding at beginning of year
Granted during the year
Cancelled during the yea
Expired during the yea
Outstanding at the end of the year
9,141,663
7.74p
8,298,757
Weighted
average
exercise
price
9.94p
6.75p
14.00p
-
8.19p
169,285 options relate to Warrants and are exercisable 1 year after admission.
6,017,526 options are exercisable after 3 years, or an exit event.
2,954,852 options relate to Warrants issued prior to the group’s admission by Digitalbox Publishing (Holdings)
Limited, a subsidiary of the company. These are exercisable upon the exercise of those warrants in a share for
share exchange arrangement, under which the company acquires all shares issued in Digitalbox Publishing
(Holdings) Limited and in consideration, issues shares to the warrant holders.
A Black-Scholes model has been used to determine the fair value of the share options on the date of grant.
The fair value is expensed to the income statement on a straight-line basis over the vesting period, which is
determined annually. The model assesses a number of factors in calculating the fair value. These include the
market price on the date of grant, the exercise price of the share options, the expected share price volatility of
the Company’s share price, the expected life of the options, the risk-free rate of interest and the expected level of
dividends in future periods.
For those options granted during the year where IFRS 2 “Share-Based Payment” is applicable, the fair values were
calculated using the Black-Scholes model. The inputs into the model were as follows:
24 February 2021
0.10%
Risk free rate
Share price
volatility
65.00%
Share price at
date of grant
6.00p
Expected volatility was determined by calculating the historical volatility of the Company’s share price for 12
months prior to the date of grant. The expected life used in the model is the term of the options.
Full details of movements in reserves are set out in the consolidated statement of changes in equity. The
following describes the nature and purpose of each reserve within owners’ equity:
Share premium: Amount subscribed for share capital in excess of nominal value.
Retained earnings: Cumulative net gains and losses recognised in the consolidated statement of
comprehensive income.
Share based payment reserve: Cumulative charges recognised in the consolidated statement of comprehensive
income in relation to share based payments.
24. LEASING COMMITMENTS
Group as a lessee
The Group leasing arrangements for their head office.
Lease liabilities are due as follows:
Current
Non-current
Contractual undiscounted cash flows are due as follows:
Current
Non-current
31 December
2021
£’000
31 December
2020
£’000
29
2
31
2
-
2
31 December
2021
£’000
31 December
2020
£’000
30
3
33
2
-
2
There is not considered to be any significant liquidity risk by the Group in respect of leases.
The following amounts in respect of leases, where the Group is a lessee, have been recognised
in the profit or loss:
Interest expense on lease liabilities
Expenses relating to short-term leases
31 December
2021
£’000
31 December
2020
£’000
2
29
31
1
24
25
62
63
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DIGITALBOX PLC
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
DIGITALBOX PLC
COMPANY STATEMENT OF FINANCIAL POSITION
FOR THE YEAR ENDED 31 DECEMBER 2021
25. CAPITAL COMMITMENTS
COMPANY STATEMENT OF FINANCIAL POSITION
At 31 December 2021 and 31 December 2020 there were no capital commitments.
26. RELATED PARTY TRANSACTIONS
At 31 December 2021, the Group was due £171k (2020: £171k) from James Carter and Jim Douglas, two Directors
of the company. Prior to the readmission of Digitalbox plc (formerly Polemos plc) onto AIM, and its subsequent
acquisition of Digitalbox Publishing Holdings Ltd, James Carter and Jim Douglas each bought shares in
Digitalbox Publishing Holdings Ltd using a company loan. The outstanding balance is split equally between the
directors and is included within trade and other receivables. The amounts are repayable either on sale of shares
by the Directors, by prior charge over the proceeds of dividends or distributions due to the directors’ net of tax
or by prior charge over remuneration payments in excess of a pre-determined level. Interest is charged at 0.75%
per annum. The Directors have chosen to use the entirety of their 2021 bonus payments to pay off the loans in full
which results in a positive cash return to the balance sheet.
During the year, Integral2 Limited billed £53k (2020: £57k) to the Group, a company related by virtue of David
Joseph, a member of key management personnel, having control over the entity. As at 31 December 2021, £5k
(2020: £5k) was owed to Integral2 Limited.
During the year, the Group received revenue of £nil (2020: £1.5k) from Immotion Group Plc, a company related by
virtue of Martin Higginson being a member of key management personnel of both entities. As at 31 December
2021, £nil (2020: £nil) was owed to the Group.
During the year, M Capital Investment Partners (Holdings) Limited billed £23k (2020: £25k) to the Group, a
company related by virtue of Martin Higginson, a member of key management personnel, having control
over the entity. The Group accrued a further £2.0k for unbilled costs as at 31 December 2021 (2020:Nil). As at 31
December 2021, £2.5k (2020: £2.5k), was owed to M Capital Investment Partners (Holdings) Limited.
During the year, Robin Miller Consultants Limited billed £11k (2020: £17k) to the Group, a company related by
virtue of Robin Miller, a member of key management personnel for part of the year, having control over the entity.
As at 31 December 2021, £1.7k (2020: £1.7k), was owed to Robin Miller Consultants Limited. The balances stated
here were for transactions up to the point that Robin Miller resigned as a director and was therefore no longer a
related party.
The key management personnel are considered to be the Board of Directors. Their remuneration is disclosed in
detail in note 9. Key management were remunerated £715k in the year ended 31 December 2021 (2020: £382k).
The key management personnel have been provided with a total of 5,963,660 share options resulting in a charge
of £100k in the period (2020: £100k).
27. POST BALANCE SHEET EVENT
On 16 February 2022, Martin Higginson exercised his warrants over 7,085 shares in Digitalbox Publishing
(Holdings) Limited which were satisfied by the issuance of 1,590,936 shares in Digitalbox plc in accordance with
a Warrant Acquisition Agreement dated 7 February 2019 under which Digitalbox plc acquires all such warrant
shares. Accordingly, Digitalbox plc’s issued share capital increased to 117,923,393 shares. The consideration
received by the company amounted to £36,275.
Fixed assets
Investments
Current assets
Trade and other receivables
Cash and cash equivalents
Current liabilities
Trade and other payables
Total current liabilities
Non-current liabilities
Other payables
Total liabilities
Net current assets/(liabilities)
Total assets less total liabilities
Capital and reserves
Called up share capital
Share premium account
Share-based payment reserve
Retained reserves
Shareholders’ funds
At 31 December
2021
£’000
11,127
11,127
1,747
20
1,767
(467)
(467)
-
(467)
1,300
12,427
1,163
11,149
464
(349)
12,427
III
IV
V
VI
VII
IX
IX
IX
At 31 December
2020
As restated
£’000
11,084
11,084
1,244
99
1,343
(68)
(68)
-
(68)
1,275
12,359
1,163
11,149
321
(274)
12,359
The Company has taken advantage of the exemptions allowed under section 408 of the Companies Act 2006
and has not presented its income statement in these financial statements. The Group loss for the year included a
loss on ordinary activities after tax of £75k (2020: £135k loss as restated) in respect of the Company which is dealt
with in the financial statements of the Parent Company.
The financial statements were approved by the Board and authorised for issue on 28 March 2022.
James Carter
CEO
David Joseph
CEO
Company registration number: 04606754
The notes on pages 67 to 70 form part of the Company financial statements.
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DIGITALBOX PLC
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
DIGITALBOX PLC
NOTES FORMING PART OF THE COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
COMPANY STATEMENT OF CHANGES IN EQUITY
NOTES FORMING PART OF THE COMPANY FINANCIAL STATEMENTS
Share
Capital
£’000
Share
Premium
£’000
Share-based
payment
£’000
Balance at 1 January 2020
21,331
29,757
Prior year adjustment
-
-
Balance at 1 January 2020 as restated
21,331
29,757
Issue of shares
Share issue costs
260
-
976
(84)
Capital reduction
(20,428)
(19,500)
Loss after tax (restated)
Share-based payments
-
-
-
-
31 December 2020 as restated
1,163
11,149
Loss after tax
Share-based payments
-
-
-
-
181
-
181
-
-
-
-
140
321
-
143
Retained
reserves
£’000
(40,122)
55
(40,067)
-
-
39,928
(135)
-
(274)
(75)
-
Total
£’000
11,147
55
11,202
1,236
(84)
-
(135)
140
12,359
(75)
143
I. ACCOUNTING POLICIES
The separate financial statements of the Company are presented as required by the Companies Act 2006. As permitted by
the Act the separate financial statements have been prepared in accordance with Financial Reporting Standard 101 Reduced
Disclosure Framework (FRS 101) and in accordance with applicable accounting standards.
The company has taken advantage of the following disclosure exemptions under FRS 101:
the requirements of paragraphs 45(b) and 46 to 52 of IFRS 2 Share-based Payment
the requirements of paragraphs 62, B64(d), B64(e), B64(g), B64(h), B64(j) to B64(m), B64(n)(ii), B64 (o)(ii), B64(p), B64(q)
(ii), B66 and B67of IFRS 3 Business Combinations;
the requirements of IFRS 7 Financial Instruments: Disclosures;
the requirements of the second sentence of paragraph 110 and paragraphs 113(a), 114, 115, 118, 119(a) to (c), 120 to 127 and
129 of IFRS 15 Revenue from Contracts with Customers;
the requirements of paragraph 58 of IFRS 16, provided that the disclosure of details of indebtedness required by
paragraph 61(1) of Schedule 1 to the Regulations is presented separately for lease liabilities and other liabilities, and in
total;
the requirement in paragraph 38 of IAS 1 ‘Presentation of Financial Statements’ to present comparative information in
respect of: (i) paragraph 79(a) (iv) of IAS 1, (ii) paragraph 73(e) of IAS 16 Property Plant and Equipment and (iii) paragraph
118 (e) of IAS 38 Intangibles Assets
the requirements of paragraphs 10(d), 10(f), 16, 38A to 38D, 40A to 40D ,111 and 134-136 of IAS 1 Presentation of Financial
Statements;
the requirements of IAS 7 Statement of Cash Flows;
the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors;
the requirements of paragraph 17 and 18A of IAS 24 Related Party Disclosures; and
the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or
more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a
member.
31 December 2021
1,163
11,149
464
(349)
12,427
Where required, equivalent disclosures are given in the group financial statements of Digitalbox plc.
The principal accounting policies adopted are the same as those set out in note 4 to the consolidated financial statements
except as noted below:
Valuation of investments
Investments in subsidiaries are stated at cost less any provision for impairment in value.
II. OPERATING PROFIT
The auditor remuneration for audit and other services is disclosed in note 8 to the consolidated financial statements.
The average number of employees of the company during the year was 5 (2020: 6) and total staff costs were £815k (2020:
£382k). Directors remuneration is disclosed in note 9 to the consolidated financial statements.
The operating loss in the prior year is stated after charging an impairment loss on the investment in Mashed Productions
Limited amounting to £238k. This impairment loss is reflective of the receipt of dividend income from this subsidiary
amounting to £238k, which was subsequently dissolved on 10 March 2020 following an earlier hive across of trade to
Digitalbox Publishing Limited. The impairment arose owing to the realisation of the distributable reserves, and these two
transactions have had a net £nil effect on the result for the prior year. These transactions had no effect on the operating
profit in the current year.
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DIGITALBOX PLC
NOTES FORMING PART OF THE COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
DIGITALBOX PLC
NOTES FORMING PART OF THE COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
III. FIXED ASSET INVESTMENTS
V. CASH AND CASH EQUIVALENTS
Subsidiary undertakings
Cost
Balance at 1 January 2021
Prior year adjustment
Balance at 1 January 2021 as restated
Additions
Disposals
Balance at 31 December 2021
Provisions
Balance at 1 January 2021
Charge for the year
Balance at 31 December 2021
Carrying value of investments
31 December 2021
£’000
11,228
94
11,322
43
-
11,365
238
-
238
11,127
Cash at bank and in hand
VI. PAYABLES: amounts falling due within one year
Trade payables
Accruals
Corporation tax payable
Other tax and social security
Other payables
VII. SHARE CAPITAL
31 December
2021
£’000
31 December
2020
£’000
20
20
99
99
31 December
2021
£’000
31 December
2020
£’000
29
403
18
16
1
467
5
38
-
16
9
68
The investment addition relates to equity settled share based payments issued to employees of the company’s subsidiary,
Digitalbox Publishing Limited, as disclosed in Note 22 to the consolidated financial statements.
At the year end the Company had the following subsidiaries:
VIII. SHARE OPTIONS
Share Option Scheme
Details of the Company’s share capital can be found in Note 21 to the consolidated financial statements.
Subsidiary name
Class of shares
Proportion of ownership
Registered office
Digitalbox Publishing Limited
Digitalbox Inc
Digitalbox Publishing (Holdings) Limited
Tab Media Limited
Ordinary
Ordinary
Ordinary
Ordinary
100% Indirect
100% Direct
100% Direct
100% Indirect
2-4 Henry Street, Bath, BA1 1JT
19 Courtland Drive, Hudson, MA 01749
2-4 Henry Street, Bath, BA1 1JT
Jubilee House, 92 Lincoln Road,
Peterborough, PE1 2SN
Subsidiary name
Digitalbox Publishing Limited
Digitalbox Inc
Digitalbox Publishing (Holdings) Limited
Tab Media Limited
Principal activity
Sale of digital advertising space
Sale of digital advertising space
Holding company
Dormant company
IV. RECEIVABLES: due within one year
Amounts owed by group undertakings
Other receivables
Prepayments and accrued income
31 December
2021
£’000
31 December
2020
£’000
1,636
-
52
1,688
1,213
10
21
1,244
Details of the share options outstanding at 31 December 2021 can be found in Note 22 to the
consolidated financial statements.
IX. RESERVES
Details of the reserves can be found in Note 23 to the Consolidated financial statements.
X. RELATED PARTY TRANSACTIONS
Details of the Company’s related party transactions can be found in Note 26 to theconsolidated
financial statements.
XI. PRIOR PERIOD ADJUSTMENT
Certain employees of the company’s subsidiary, Digitalbox Publishing Limited, have been granted rights to
equity instruments in the company in consideration for services provided to its subsidiary. The associated share
based payment charge has been recorded in the financial statements of the company, but instead should have
been recorded as an expense in the subsidiary’s financial statements.
As a result, at 1 January 2020 the investment in the subsidiary has been increased by £55k by increasing retained
earnings by the same amount. The loss for the year ended 31 December 2020 has decreased by £39k, with a
corresponding increase in the investment in the subsidiary.
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DIGITALBOX PLC
NOTES FORMING PART OF THE COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
DIGITALBOX PLC
DIRECTORS, SECRETARY AND ADVISERS
FOR THE YEAR ENDED 31 DECEMBER 2021
XI. PRIOR PERIOD ADJUSTMENT (CONTINUED)
The consolidated financial statements and accordingly earnings per share are unaffected by this error and the associated correction.
The impact on the financial statements is analysed below.
At 1 January 2020
A 31 December 2020
Previously
reported
£’000
Prior year
adjustment
£’000
As
restated
£’000
Previously
reported
£’000
Prior year
adjustment
£’000
As
restated
£’000
11,192
55
11,247
10,990
94
11,084
155
22
1,343
(214)
(214)
(8)
(222)
(37)
-
-
-
-
-
-
-
-
155
22
1,244
99
1,343
1,343
(214)
(214)
(8)
(222)
(37)
(68)
(68)
-
(68)
1,275
-
-
-
-
-
-
-
-
1,244
99
1,343
(68)
(68)
-
(68)
1,275
11,147
55
11,202
12,265
94
12,359
Fixed assets
Investments
Current assets
Trade and other
receivables
Cash and cash
equivalents
Current liabilities
Trade and other payables
Total current liabilities
Non-current liabilities
Other payables
Total liabilities
Net current
assets/(liabilities)
Total assets less
total liabilities
Capital and reserves
Called up share capital
Share premium account
Share-based payment
reserve
Retained reserves
21,331
29,757
181
(40,122)
-
-
-
55
55
21,331
29,757)
181
(40,067)
1,163
11,149
321
(368)
11,202
12,265
-
-
-
94
94
1,163
11,149
321
(274)
12,359
Shareholders’ funds
11,147
Directors
Company Secretary and Registered Office
Marcus Rich
James Carter
James Douglas
Martin Higginson
David Joseph
Philip Machray
David Joseph
2-4 Henry Street
Bath
England
BA1 1JT
Company Number
04606754
Registrars
Nominated Adviser and Broker
Joint Broker
Independent Auditors
Solicitors
Share Registrars Limited
The Courtyard
17 West Street
Farnham
GU9 7DR
Panmure Gordon
One New Change
London
EC4M 9AF
Alvarium Capital Partners
10 Old Burlington Street
London
W1S 3AG
Haysmacintyre LLP
10 Queen Street Place
London
EC4R 1AG
FREETHS LLP
Floor 3
100 Wellington Street
Leeds
LS1 4LT
Country of Incorporation of Parent Company
England and Wales
Legal Form
Public Limited Company
Domicile
United Kingdom
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Digitalbox PLC
2-4 Henry Street
Bath
BA1 1JT
United Kingdom
Co Reg No. 04606754
+44 (0)1225 430 091
digitalbox.com
© 2022